Travel firm pockets savings on cheap fares

One of Britain's leading discount travel agents has been pocketing thousands of pounds by secretly rebooking existing customers on long-haul flights.

BBC1's Weekend Watchdog programme will reveal tonight how Travelbag, based in Hampshire, exploited short-term "special fares" from leading airlines to boost earnings way above normal commission levels. The company asked staff to rebook existing passengers at cheaper fares, but with no intention of passing on the savings to customers.

The programme has obtained copies of internal e-mails in which Travelbag staff were invited to "earn more £££££'s" by cancelling existing bookings and immediately rebooking them at the new, lower fares. The practice - which is not illegal - has been made possible by sharp fluctuations in long-haul fares, particularly over the past four months.

The potential for profit is shown by price movements on the benchmark London to Sydney route, for travel in early December 2000. A flight booked at the start of this year would have cost about £900 for a one-stop trip on a quality airline such as British Airways, Qantas or Singapore Airlines. With intense competition between discount flight agents, the usual commission on such a ticket would be around £50. But in February, the Singapore carrier cut its fare as low as £555 during a three-day promotion designed to fill empty seats, multiplying potential earnings six fold.

A confidential e-mail circulated by Travelbag's air product department to the company's sales offices in London, Cheshire and the West Midlands reads: "It is possible for you to increase your commission on existing bookings by applying the new fare with SQ [the code for Singapore Airlines] and make between £100/£140 per seat."

Short-term promotional fares are intended to attract new passengers, not to benefit agents or existing customers. But the practice of rebooking is hard to detect, because when a passenger buys a long-haul flight the ticket is not normally issued until two weeks before departure.

A rebooked seat is for the same flight on the same date, so only a ticketing expert could notice any discrepancy. In some circumstances, passengers could suffer through not being able to change reservations to a different flight so easily, but Travelbag said that none of its customers was disadvantaged. "At no time has any passenger been overcharged."

Last month, British Airways and Qantas cut fares to Australia and New Zealand during the Olympic Games in September. Travelbag circulated another e-mail, urging sales staff to earn extra commission by rebooking flights on BA and Qantas. The agent also rebooked some passengers on flights operated by Air New Zealand, Emirates and Lufthansa. The airlines involved have condemned the practice. British Airways said the airline would "investigate the allegations and take the appropriate action with the travel agent concerned".

At least one airline is considering stepping in to insist that passengers affected by rebooking are given a refund reflecting the difference between the original fare and the rebooked version. Such action could mean travellers receiving an unexpected bonus when they return home.

The Association of British Travel Agents, of which Travelbag is a member, condemned the company's behaviour. Keith Betton of Abta said "While what they're doing is not illegal, we discourage it and have asked Travelbag to reconsider its policy."

The company said it had stopped rebooking. "New procedures are now in place to ensure that the practice in question does not reoccur."