losses at the Island's biggest travel agent.

Meyer last night announced they would be making five staff redundant after a shake-up of departments, prompted by the news this week that American Airlines was slashing commission on tickets.

A further two senior agents decided to take retirement.

The 40-percent cut, which means agents would only receive a six-percent commission of a ticket value, means Meyer -- who are the largest American customer on the Island -- have lost a "substantial'' amount of their revenue.

The new rates, which come into affect tomorrow (SAT), prompted a summit meeting which resulted in a re-structuring of the business, an undetermined increase in booking fees together with the job losses.

Meyer executive vice president Carl Paiva said the company was to have talks with American Airlines next week, at which time the commission rates will be discussed.

"We can't sit back and cry,'' he said. "We say `how can we turn this around, how can we make it work?'.

"The saddest thing for us is to affect people's employment. We are a family company, that has been the hardest thing to deal with.'' Staff were told of the changes at meetings this week and of a re-structuring of departments to promote further diversification of the business.

And Mr. Paiva said they were concerned that the other airlines may follow suit in cutting commissions, adding that Meyer would try to channel business to airlines that "understood the value of our business'' and offered to bypass any commission cuts for corporate clients.

"We realise that all the airlines haven't cut across the board yet, but American represents approximately 40 percent of business to Bermuda,'' he said. "We are the largest agency who has American. It has gravely affected our income.

"We will move business to the airlines that partner with us, give us over-rides for the value of business we give and recognise the value of our corporate travellers.'' Mr. Paiva said Meyer still wanted to work with American but that at least two of the Island's carriers had hinted that they were keen to forge closer ties with agents.

"We believe in business ethics,'' he said. "We have always worked with American's local office and always had an excellent relationship with them.'' In a bid to counteract the commission cut, Meyer are bringing forward several projects to attract new business, including their Bermuda Escapes website -- which sells Island vacations -- and Travelsavers Travel Club.

Much of their business in St. George's will be consolidated into their airport facility. In addition, the existing 70 staff will receive more training from overseas vendors.