The runway ends for travel agents

Beleaguered airlines, weighed down by rising costs, have decided to put the knife into travel agents so that they themselves stay alive.
On Monday, full-service carriers Jet Airways, Kingfisher and state-owned Air India issued letters to the representative bodies of travel agents ?- Travel Agents? Association of India (TAAI) and Travel Agents Federation of India (TAFI) ?- saying they will not pay the 5% commission with effect from October 1. But Kingfisher and Air India said travel agents are free to charge a 'transaction fee' from passengers instead, which only makes travel costlier.
Budget airlines such as SpiceJet, Deccan, IndiGo, GoAir and JetLite have not been paying commissions.
A top TAAI official, who did not want to be named, said the move would translate into revenue losses of close to Rs 800-850 crore for travel agents across the country.
"Out of the total international and domestic airline ticket business of Rs 34,000 crore, around 85% is carried out by travel agents. This means that we take care of Rs 28,000 crore airline tickets sold in India. On this, our earning is an average 3% (Rs 800-850 crore), while 2% of our commission is for fuel surcharge and other taxes," said a TAAI official.
24/06/08 Nija Shah, Madhumita Mookerji & Praveena Sharma/DNA MONEY/Sify

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Categories: Indian Aviation- In General Jun 2008