Domestic air passengers, already
reeling under high fares, would now have to fork out more. Travel agents have
decided to impose a service charge of Rs 225 from July 16 on customers of full
service carriers.
That is because full service
carriers such as Air India and Jet Airways are reducing the commission they pay
to travel agents and portals from three per cent to one per cent. To make up
the loss, agents will charge passengers a service fee
Confirming the development, Deep
Kalra, founder and chief executive of MakeMyTrip.com, said: “All agents, online
and offline, have agreed to charge a service fee of Rs 225 on every customer of
full service carriers. This will ensure our overall margins remain the same,
despite the cut in commissions.”
Agents say even in the international
skies, as foreign airlines cut agents’ commissions, the difference would be
passed on to travelers. “We will be collecting service charge from passengers.
Even Gulf Air is reducing its commission from three per cent to one per cent
and Emirates from five to three per cent,” said Pradeep Lulla, former president
of the Travel Agents Federation of India. “However, the impact these changes
will have on fares has still not been assessed by the agents.”
At present, AI spends Rs 1,000 crore
annually on ticket distribution, which includes agents’ commission and fees for
use of reservation systems and global distribution systems that hold ticket
inventories. This is about six per cent of its annual expense.
Jet Airways spent Rs 1,261 crore on
ticket distribution and sales in 2010-11, which accounted for 10 per cent of
its expenditure, according to the airline’s annual report.
Low-cost carriers are, however, out
of the preview of the new changes because they do not pay commission to agents
and, instead, offer them incentives based on volume of tickets sold. As a
result, agents charge a transaction fee on bookings in these airlines.
International airlines like Air
France-KLM, British Airw-ays and Lufthansa do not pay regular commission. Those
who give commission includes Emirates, Cathay Pacific Airw-ays, Gulf Air and
Sri Lankan Airlines, among others.
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