TORONTO — Air Canada’s travel advisor partners know all about the travel industry’s recent challenges – because they’ve been dealing with many of those challenges too.

While jet fuel’s roller coaster ride directly impacts the airline industry’s bottom line – to the tune of an extra US$1 billion, according to IATA – these past few months have been an uphill battle for travel advisors too, with skittish clients often reluctant to book travel. Agents are also on the front lines to explain soaring airfares, fuel surcharges, hiked baggage fees and more.

Advisors are angry about Air Canada’s decision to cut commissions, like the agency owner who decried the move: “It’s 1% lower across the board and absolutely no incentive to upgrade to premium cabins, unlike the other international carriers.”

Advisors like Michelle Whalen with TTAND are also disheartened and frustrated.

“I am disappointed,” Whalen told Travelweek. “I know there is another side to the story always and difficult decisions have to be made. Nevertheless, advisors have been through the ringer with airlines on different concerns for the last five or six years and it doesn’t seem to let up: COVID, cancellations, strikes, fuel crises, route cutbacks, last minute cancellations. All of those issues require our intervention and we deserve to be paid fairly for that time.”

Whalen added: “The commission/service fees don’t fairly compensate. It does make me more even hesitant to book directly with the airline and instead with a flight consolidators with whom I have more control over more flexibility with pricing and stronger partner relationships. I have preferred to use a consolidator for quite a while for these reasons. But Air Canada is cutting back on the consolidator’s margin too. Profit cuts always have a ripple effect. A commission cut isn’t that much different than a salary cut.”

AIR CANADA: “LONGER-TERM STRATEGY”

Air Canada’s updated commission structure takes effect July 1, 2026.

“We are very mindful of the pressures our partners in the travel industry are under. We feel these same pressures,” said Air Canada spokesperson Peter Fitzpatrick.

“That said, we are confident that for agencies under an agreement with us, we still offer a compelling incentive program. As well, we have a long record of working with our agency partners in difficult times, such as during COVID, and we have launched new programs such as AC&Me to find new ways to recognize their contributions. We will continue to work with and find innovative ways to support and compensate our agency partners.”

Fitzpatrick noted that the environment is evolving, including overall higher costs, rising market uncertainty and the impact of new technology, including AI. “We are under high cost-pressures. Adapting to these changes requires that we manage our costs accordingly. Given this, Air Canada has decided to review the way it pays commissions to agencies in Canada.”

He said the change in the commission plan is part of a longer-term strategy that Air Canada decided to accelerate “due to the conditions we find ourselves in 2026.”

“I KNOW MANY ADVISORS WHO ARE NOT HAPPY ABOUT THIS”

The exponential rise in the cost of jet fuel is a major factor in changing market conditions, but not the only factor, said Fitzpatrick. “With our New Frontiers 2030 strategic growth plan, we are reorganizing our business. For example, at the end of 2025, we made significant reductions in management headcounts among other cost savings measures being implemented company-wide.”

Fitzpatrick added: “We have repeatedly told the financial market, controlling our costs is a top priority as we also grow and invest in our airline. With our Q1 results, we suspended financial guidance for the full year. We have also been clear that we can only recoup 50-60% of the additional fuel costs for the second quarter of 2026. Our cost of sales through agencies is growing faster than our revenue gain, which is not sustainable. Against this background, we have made the conscious decision to accelerate that rate review in 2026.”

ACTA President Suzanne Acton-Gervais said ACTA is “deeply concerned and disappointed” by Air Canada’s decision to significantly reduce travel agency and travel advisor compensation.

“While ACTA has no visibility into the commercial agreements between Air Canada and individual agencies, the feedback we are receiving from members across the country is clear: these reductions are substantial and will have a meaningful impact on many travel businesses,” said Acton-Gervais.

Announced immediately following Travel Advisor Appreciation Month and with a short transition period, the changes came as a surprise to many agencies that have already made business, staffing and investment decisions based on existing arrangements, she said, adding that ACTA has met with Air Canada on two occasions and formally communicated its concerns to the airline’s executive leadership team, and also raised the issue with the federal government.

Even with an end to the war and the reopening of the Strait of Hormuz potentially in sight, there’s no guarantee airfares will come down any time soon.

That leaves advisors like Whalen with questions. “Will the consumer prices stay higher even once the fuel issues are resolved with the political climate? And will the commissions go back up as well?” she said.

Whalen added that she’s thankful for retail groups like ACTA, and host agency execs, who are advocating for travel advisors right now.

“We already do so much extra for the little we get. I know many advisors are not happy about this.”