Mumbai: The Supreme Court directing airlines not to collect transaction fee from passengers will hit travel agents. Air India and Jet Airways introduced the fee last year after slashing agents commission to one percent from the earlier three percent while low cost airlines have been collecting the fee from earlier.
Profit margins in selling air tickets have fallen from around 7 to 8% to around 5 to 6%. With the slash of the transaction fees, the agents' profit margins is expected to fall further to 3-4%, said a travel agent.
The Supreme Court ruling will benefit the passengers but will impact the agents hard as many airlines have reduced commission or offer no commision at all. The transaction fee is one of the source of income for agents others being commission, productivity bonuses and incentives from global distribution systems.
“The transaction fee shall not be collected from any passenger in any form or under any other name,” a bench of justices D K Jain and Madan B Lokur said. The apex court also directed the Directorate General of Civil Aviation ( DGCA) to examine the tariff structure of the airlines in view of their wide range of base prices for air tickets.
23/01/13 Aneesh Phadnis/Business Standard
