Hit by airlines, travel portals try new revenue options

New Delhi: Indian travel agents have begun reworking their revenue streams after a funds crunch forced three leading airlines to scrap their commission.
The aviation industry, struggling to cling on to competitive pricing despite increased overhead costs, is now faced with the prospect of a Rs.80-billion ($1.86-billion) loss because of the recent fuel price hike and inflation.
Jet Airways, Kingfisher Airlines and Air India have decided to scrap the five percent commissions for travel agents from Oct 1. The move, say people in the travel industry, will hit nearly 4,000 travel agents across the country whose annual turnover is nearly Rs.360 billion ($8.38 billion).
Consequently, this segment is reinventing itself to move away from over-dependence on airlines to new sources for revenue generation, especially in the domestic market. The new survival strategy, say travel vendors, is diversification.
The industry is looking to lucrative hotels deals as add-ons to air packages to keep afloat and retain its client base. Travel operators are trying to make up for the loss in commission revenues by making the customers pay for the special add-on services.
According to Vikas Jawa, director of travel search engine Zoomtra.com, the new trends are getting reflected faster in the online travel segment.
"All travel packages, especially in the online vending segment or even otherwise, are centred on the best prices for flight deals, which offer sops like 50 percent cash-back on online purchase of tickets and buy-once-and-book twice deals," said Jawa, whose portal acts as an aggregator for travel deals.
01/06/08 IANS/Economic Times

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Categories: Indian Aviation- In General Jul 2008