Travel agents fear move will lead to drop in commission

Travel agents have opposed the civil aviation ministry’s decision on unbundling some services, fearing a further drop in commission. Last week, the government allowed airlines to charge separately for meals, preferred seats, luggage and use of lounges, among others.The Travel Agents Association of India (TAAI), which has called its 2,800-odd members to observe a voluntary shutdown tomorrow, is opposed to the government move. According to association members, the agents in Mumbai alone sell air tickets worth over Rs 100 crore a day. The agents, who are at loggerheads with airlines on the issue of commission, feel the move would hurt them further.“We have no issue with airlines charging for insurance or a sandwich, but should be included in the basic fare. There has to be one base fare without any break-ups,” said Jay Bhatia, chairman (west region), TAAI.While the European airlines do not pay a regular commission, Air India and Jet Airways pay one per cent on basic fare and fuel surcharge. Productivity bonus is only paid on the basic fare. The agents fear commission amount would drop further if unbundling of services is allowed.The agents are demanding airlines pay them five per cent commission and drop the plan to reduce weekly payment cycle from 15 days to seven days. Also, the agents are demanding restoration of transaction fee, which they collected in lieu of commission, for selling low-cost airline tickets.“Over 70 per cent of tickets, which are sold now, are non-refundable. We face the passenger brunt, while airlines collect cancellation charges, date change fees,’’ said TAAI member Nasrulla Tejani.
 “The airlines are cutting their marketing arm. Reducing the payment cycle would make it difficult for agents to take care of administrative expenses. The travel agents community will perish and we do not want that to happen,’’ association chairman Iqbal Mulla said.
http://www.business-standard.com/article/companies/travel-agents-fear-move-will-lead-to-drop-in-commission-113050400636_1.html