Air travel agencies tap options to offset shrinking commissions

As domestic and international airlines are readying to stop paying commission to travel agents in India as part of their efforts to cut costs, travel agents are changing their roles—from sellers of airline tickets to tour consultants.
Industry experts say most small-time agents will be forced to shut shops but the bigger ones will not face any problem as they will earn special bonuses, instead of commission, from airlines by raising the volume of business.
There are nearly 3,000 Iata-accredited agents and at least 40,000 non-Iata agents in an industry that employs around 500,000 people across India. Less than 10% of them are big-ticket agents.
According to Ajay Prakash, national general secretary of the Travel Agents’ Federation of India, there is bound to be a shake-out. “When similar thing happened in the US early this century, 30% travel agents downed shutters. Here, if the airlines want to stop commissions, it should be done in phases,” he says.
C. Venkateshwara Prasad, president of Travel Agents Association of India, or Taai says the smaller travel agents will start operating from home. These agents will also broad-base activities by handling tours for cruise ships or adventure spots, he adds.
Online travel agents, or OTAs, such as Ezeego1.com, Yatra.com and Makemytrip.com have also started finding alternative sources of revenue.
With airlines doing away with commissions, some agencies will fold up while others will add fees.
18/07/08 P.R. Sanjai/Livemint

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Categories: Indian Aviation- In General Jul 2008