Major airlines plan portal to save on commission

New Delhi: Domestic air-carriers Kingfisher Airlines, SpiceJet and IndiGo have found a way to save on agent commission and service charge.
The three, under the banner of Federation of Indian Airlines (FIA), are planning to launch a travel portal — rang7 — to sell air tickets. The industry body is expected to take up the proposal in its next meeting, a person familiar with the development said. Air India, Jet Airways and Kingfisher Airlines have earlier once withdrawn agent commission but had to soon restore it under pres-sure from thousands of travel agents across the country. According to industry estimates, distribution of air tickets through travel agents and travel portals such as Makemytrip.com and Yatra.com costs airlines nearly Rs 200 crore annually.
The proposed portal is likely to be launched within two months. It will show fares offered by different airlines in ascending order, unlike existing portals which show fare options in the order they want. A venture capital fund has committed to invest close to $3 million in the company, an industry official said on condition of anonymity.
Other carriers are also expected to follow suit. Industry officials said participating airlines would own the portal even without investing in it.
The business model of Rang7 is based on the lines of Orbitz in the US and Opodo in Europe.
15/05/09 Nirbhay Kumar/Economic Times

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Categories: Indigo Airlines May 2009, Kingfisher May 2009, New May 2009, SpiceJet May 2009