AIR India and Jet Airways have slashed travel consultant commissions on domestic and international ticket sales from three to one per cent starting July 16, in the process jeopardising the financial viability of over 5,000 IATA-affiliated travel companies in India.
The two carriers have recommended that ticket issuers should instead charge clients a handling fee of Rs. 225 and Rs. 325 respectively for domestic economy- and business-class tickets; Rs. 775, Rs. 1,300 and Rs. 3,250 respectively for economy-, business- and first-class fares to short- and mediumhaul destinations such as Dubai, Singapore, Bangkok and Colombo; and Rs. 1,625, Rs. 3,250 and Rs. 6,500 respectively for longhaul international sectors.
Other Indian carriers such as IndiGo, Go Air and Spice Jet do not offer commissions to travel consultants; neither do international carriers operating in India, with the exception of Emirates and Thai Airways.
Anil Punjabi, chairman – east, Travel Agents Federation of India, said: “This will create mayhem in the market as the issuance fees charged to customers will not be uniform and lead to a price war. Smaller companies will not be able to weather the storm. Less than three per cent commission does not make any sense and should be built into the fare.”
Meanwhile, IATA’s implementation of its weekly remittance system in India from November 2012 (TTG Asia e-Daily, June 8, 2012) is expected to compound the problem and cause a cash flow crisis for local travel companies.
P. P. Khanna, director, Diplomatic Travel Point New Delhi, said: “Airlines must ensure that they do not sell tickets at prices lower than what can be offered by travel consultants. Parity must be maintained for fair trade practice.”
