After the International Air Transport Association (IATA) burdened travel
agents by shrinking their payment schedule from fortnightly to weekly,
Indian carriers are adding to their woes. Two of the largest airlines,
Jet Airways and Air India, have decided to stop absorbing the surcharge
on payments by agents made through credit cards.
Both, by not absorbing the surcharge, aim to save Rs 30 crore each
annually. Ironically, Kingfisher Airlines, in a huge financial crisis,
has not issued any such order.
?We decided to absorb that charge earlier because that ensured
immediate money to us. Now, we have decided not to absorb it and have
asked the agents to make that payment, as they also get a 50-day period
to make their credit card payments,? said a senior AI official, who did
not want to be identified. Likewise, Jet has decided not to absorb the
two per cent surcharge from May 1.
Agents make payments to airlines by cheque or credit card. In the
latter transaction, money reaches the airline immediately but the
clearance of cheques normally takes three to four days.
Recently, IATA told travel agents they?d have to remit ticket sale
proceeds to airlines every week, in place of the current fortnightly
span. It has slated the change to take effect from June 1, even as
agents are demanding a deferment in implementation. The proposed change
would substantially change the way airline ticketing business is done in
India.
IATA?s billing settlement plan (BSP) is a payment gateway for travel
agents. Twice a month, agents are required to remit to airlines the
proceeds from ticket sales. For instance, if a ticket is sold by an
agent between the 1st and 15th of a month, the agent deposits the amount
to the airline on the 25th or the 30th of that month. According to the
new plan, for all sales between the 1st and 7th, an agent will have to
make payment to the airline on the 15th and so on. Low-cost airlines
such as IndiGo, GoAir and SpiceJet are not members of the BSP.
Agents say they will find a way out by talking to the banks. ?Our
payments to airlines are huge and any bank would like to waive the
charge for us. We are talking to the airlines and also asking them to
talk to banks or allow us to talk to them. We expect a solution on this
soon,? said Ajay Prakash, president, Travel Agents Federation of India,
which represents half the country?s agents.
He said airlines were ready to absorb the surcharge for tickets
booked on their websites ?but not for us?. ?The credit payment is only
10 per cent of their total revenue.
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