Seismic shift awaits the travel agent

Bangalore: Life is set to change for the travel agents after November 1. That’s the date from which airlines will stop paying commission to them.
And that, says C V Prasad president of Travel Agents’ Association of India (TAAI), will wipe out over Rs 900 crore of commission income of IATA-approved travel agents in India. With so much at stake, travel agents have been holding hectic parleys with airlines to work out ways to safeguard their livelihood.
From their discussion with the carriers, one substitute for the agents’ commission that has emerged is the service/transaction/management fee. This charge would range from 1% to 2.5%, based on the sector/route, and would be levied by both airlines and the travel agents.
If this gets the nod of the airlines, then the travel agents will be able let out a sigh of relief.
“The proposed service fee would mean no loss or diversion of business. It would completely replace the income that we are earning from commission,” says Prasad.Yet, the service fee that promises to keep the income of the agents’ intact would bring about one major change in their business.
It will move a travel agents’ business away from airlines to bring it closer to customers. “We would become more dependent on the customers than on airlines to earn our revenues as the service fee would come from our customers,” said Anoop Kanuga director Bathija Travels Pvt Ltd.
08/10/08 Praveena Sharma/Daily News & Analysis

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Categories: Indian Aviation- In General Oct 2008