Commission cut adds to agents’ agony

It's getting worse for the travel agents’ community. With all major airlines expected to drop the 5% commission on basic fares sold through travel agents, many could be out of business.
It is estimated that there are 8,000 travel agents in India, 2,000 of which are members of the International Air Transport Association (IATA).
Industry experts feel if the airlines go ahead with this cut, the first causality will be the small agents as the big ones will be able to survive on a performance basis.
Explains C V Prasad, president, Travel Agent Association of India (TAAI): “We all are faced with the most difficult challenge in the history of the travel and trade business. Of all the decisions forced upon us by airlines, this one on zero commission is the most damaging till now.
We can understand the plight of the airlines which are fighting for their survival, but they too must understand that they cannot do without agents who sell 90% of their tickets.”
Major airlines had last reduced agents’ commission in May 2005, from 7% to 5%. It’s worth mentioning here that low-cost airlines — Indigo , SpiceJet and Go Air — pay no commission on tickets and agents charge a transaction fee from passengers on sale of every ticket.
24/08/08 Raja Awasthi/Economic Times

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Categories: Indian Aviation- In General Aug 2008