Budget airlines, travel portals on collision course

Up till now makemytrip.com, travelguru.com and other travel portals were offering among the cheapest airline fares. That is about to change.
Budget airlines have begun negotiations with these portals, also known as online travel agents, to reduce their commissions.
They also want to make the fares offered by travel agents costlier than theirs by loading on some extra charges if the ticketing comes through them.
Low-cost airlines have been driven to initiate these moves because their distribution costs have been rising as sales of their ticket through agents move up, while sales on their own website decline.
Currently, budget airlines are paying close to 2-3% commission to the agents.
To promote sales on their portals, the agents sacrifice part of their commission by passing it on to the airline customers.
31/03/08 Praveena Sharma/DNA MONEY/Sify

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Categories: Low Cost General Mar 2008