British Airways fares shake-up

British Airways' new fare structure starts in April

By BBC economics reporter Pauline McCole

British Airways is changing its fare structure, increasing the cost of some domestic and short haul fares by up to 9% while cutting the price of many long-haul economy and business class fares.

For some long haul routes the saving will be £110, while for business and first class passengers the savings are even greater, rising to £516 for some first class tickets.

BA says it can afford to make the price cuts on more expensive tickets because it is changing the way it pays travel agents.

But this does mean that some cheaper fares will have to rise.

The new system means that instead of paying agents a percentage commission based on the price of a ticket, BA will pay agents a fixed fee for handling ticket sales.

The flat fee BA will pay to travel agents on some domestic and short haul fares is greater than the percentage it used to pay, hence the fare has to rise to take this into account.

BA is offering discounts for online sales

The new fare structure will not come into force until 1 April.

Many potential customers of BA may delay buying tickets, in the hope of getting a cheaper flight.

But these travellers will have to balance the potential saving against the risk of limited ticket availability.

BA also seems to be keen to cut travel agents out of its sales process entirely by promoting its internet ticket sales service.

BA is offering a £5 discount for any ticket bought online at the British Airways website, following the lead set by the low-cost, no-frills airline industry.

It is now thought likely that other traditional airlines will follow BA's move, one which could hit small independent travel agents hard.

The larger travel chains are now owned by package holiday firms so the business they do with airlines is less important to them.

But for the smaller operators, specialising in customised services, the value of commission based airline sales is relatively high.

If other airlines copy BA's new sales structure, it could make it more difficult for agents to make money out of airline ticket sales.