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Travel agents threaten to stop selling airline tickets

Jul 21, 2008

Major travel agents have threatened to stop selling domestic and international air tickets until airlines agreed to restore commissions that they had said they would scrap starting October 1, citing higher costs and slower growth.

The decision was taken at a meeting in Mumbai by the country's three top travel associations — the Travel Agents Association of India, Travel Association Federation of India and Indian Association of Tour Operators — representing over 4,500 IATA-accredited international and domestic agents and more than 85 per cent of the total air ticketing business.

The associations said they would stop selling tickets if a meeting between the agents and leading airlines scheduled for July 24 in Delhi did not come out with a solution.

The move could impact air travellers, who may face problems booking or cancelling tickets only through company-owned ticketing counters or through the internet, which is not a popular option for internatonal travel.

Airlines have been giving agents 5 per cent of their base fare on the tickets as commission, a recent reduction from the earlier 9 per cent. Last month, domestic airlines Jet Airways, Kingfisher and Air India unilaterally sent letters to travel agents saying no commissions would be given from October 1. Foreign carriers like Lufthansa, Singapore Airlines and British Airways, among others, did the same. Airlines say they will save over Rs 1,000 crore from the move.

"This zero-commission is the question of our very existence," said Sunil Bijlani, a travel agent from Mumbai.

Agents question the premise of doing away with the commission and cite examples of Australia and Japan, where the commission is still 9 per cent. "Airlines like British Airways and Singapore Airlines are profitable. Why do they not want to pay us?" questions Hari Devnani, a travel agent.

Airlines in Pakistan recently introduced zero-commission for the agents but reversed the decision within a week.

Travel agents threaten to stop selling airline tickets

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