Airlines could do away with commission to travel agents

Indian travel agencies, which employ nearly one million people, could soon see a major earning drying up if airlines decide to do away with commissions they pay on tickets the agents sell.

According to a person close to the development, domestic and international airlines are holding informal meetings to finalize a strategy to pay no commissions to cut costs, with “an Indian full-service airline leading the charge”.

The civil aviation industry, beset with fierce competition and high fuel costs, currently pays travel agents 5% on the base fare that excludes taxes, down from 9% only a few years ago.

Private carrier Jet Airways (India) Ltd’s chief executive officer Wolfgang Prock-Schauer said the US, Canada, western Europe, some countries in West Asia and Singapore do not pay commission on tickets to travel agents, who now charge a transaction fee from customers.

However, travel agents are unmoved with this latest development as 85% of the business is done through them and they claim that they are “aware about airlines’ secret agenda”.

Prakash said the airlines should ensure that travel agents are compensated through a service or consultancy fee, which could even be levied from customers.

P.R. Sanjai/Livemint