cut commissions for business and first class seats.

BA's local general manager Phillip Troake told The Royal Gazette yesterday that he felt the money set to be paid to travel agents under the new system was "more than adequate''.

"We understand that inevitably the change will take money off the table as far as travel agents are concerned, but the compensation they will still be earning is more than adequate for the work they are doing,'' he said.

The new compensation package goes into effect in Bermuda and other major markets around the globe on January 1.

It is already in effect in the US where other airlines placed compensation caps on domestic and international tickets some time ago.

Under the old package, travel agents were paid ten percent commission on all the BA tickets they sold.

This meant they were netting more than $500 for each first class ticket sold; more than $300 for each club class (business) ticket and around $75 for each economy ticket.

Through the new package travel agents will get five percent commission for first class tickets, seven percent commission for club world tickets and will keep the ten percent commission for economy class tickets they sell.

They will earn some $280 for first class tickets and $260 for club world tickets under the new arrangement.

Mr. Troake said: "I feel that is more than adequate compensation for issuing that one ticket.'' Meanwhile compensation for economy ticket sales will remain constant. Seventy seven percent of ticket sales are from this class.

Travel agents have responded by threatening to impose a $20 service fee on all British Airways tickets -- even those for economy class -- and by threatening to actively promote alternative ways of getting to the UK and Europe from the Island.

Mr. Troake noted the compensation package information would not normally be made public.

BA defends cuts in commissions "Frankly, this is between us and the travel agents that we contract to do business with us,'' he said.

However this relationship had been broken with local travel agents contacting the media, he added.

He stressed that the new compensation package was not intended to drive business away from the travel agents and toward BA.

"We would prefer for our product to be sold through travel agents. We are happy with the arrangement we have. The last thing we want people to do is flock to British Airways to buy tickets.'' Instead the new package was designed to allow the airline to "get a better handle on costs'' by "tweaking'' the system to make it more equitable, he said.