Airfares likely to rise from January 1
(TVLW) - If you are hoping that the new year would herald happy tidings, be cautioned: the airfares are likely to spurt on January 1. Travel industry sources in Qatar are moving into a “zero commission” regime in the new year, which will mean that airline will no longer pay them any commission for selling tickets.
(TVLW) – If you are hoping that the new year would herald happy tidings, be cautioned: the airfares are likely to spurt on January 1.
Travel industry sources in Qatar are moving into a “zero commission” regime in the new year, which will mean that airline will no longer pay them any commission for selling tickets.
Instead, the Civil Aviation Authority (CAA) has mandated that they, the travel agents, charge passengers an amount not less than 5% of the ticket fare. Traditionally, airlines give a 7% commission to the travel agents.
In theory, airlines should make a corresponding reduction in the net fare but sources indicated that some carriers might not do so. Even those carriers which were considering to reduce the fare, as per a CAA directive, are now “waiting and watching” the market to see what the others would be doing, a manager revealed.
Since the market is good for the airlines, they could sell tickets at any price, industry sources pointed out. This is particularly applicable in the sub-continental market where the fares have traditionally been “high” by any standard.
Industry sources indicated that instead of the fares dropping by 2%, they, in all probability, would increase by a minimum of 5% and more if the journey involved changes in plan.
That is, the travel agents would charge a minimum of 5% for issuing a ticket. But, if the passenger were to change his travel date or needed any other service, the travel agent would levy a further fee.
The CAA has allowed the travel agents to charge any “reasonable” fee “without harming the consumer” for additional services in addition to the basic 5% ticketing charge.
However, many travel agents said they would be actually levying at least 7% of the fare as the basic ticketing fee. Further services, of course, would cost more.
One travel agent even indicated that he was looking at charging 7% on the entire fare, which includes taxes. His justification was that everything in Qatar had become terribly expensive. The rental and salary expenditures had multiplied but the agency income had remained stagnant.
Introduction of service fees, the CAA hopes, “will herald the start of a new era in the travel industry in Qatar. It should also ensure that other countries in the region benchmark Qatar as a model for travel industry ‘best practices’ in the region”, the CAA told airlines and travel agents in a circular.
According to the regulatory body, the service fees would “ensure greater transparency in the market, both for customers and travel agents. Travel agents should be able to capitalise on this by now being able to offer and charge customers for a much wider range of value added services”, the circular said.
“Service fees are the most effective way to generate new revenue sources for travel agencies that will guarantee their long-term profitability”, it added.
The circular has stressed that the “ticketing fee of 5% cannot be undercut. However, agents are at liberty to charge more than the prescribed level”.
The introduction of service charges could probably give a boost to online booking by passengers themselves. Currently, not even 10% of the passengers in Qatar opt for this facility, industry observers estimate.
They feel that even if some more people take the option, “still it can’t be much more than another 5%”. It would mean that the services of travel agencies would be widely used in this market for the foreseeable future.