Come November and airline tickets are set to get more expensive. As the 0% commission regime for the travel agents becomes the new order of the day, a new component-transaction fee will be added to the ticket, which will be charged from the consumer.
In lieu of the 5% commission that agents received on the basic airfares, a standard fee of Rs 350 on domestic air tickets (economy) and Rs 500 on domestic (business) will be levied.
The fee on international air ticket will be in the range of Rs 1,200-2,500 (economy), Rs 2,000-5,000 (business) and Rs 5,000-10,000 (first class).
Moreover, airlines have also agreed on the demand of printing the transaction fee on the ticket till December 2009 at least. This charge will show on the ticket in the `other charges? column. Airlines too, will charge the same fee as travel agents for booking tickets on all channels of distribution including the web.
The new rates will ensure that the travel agents get better returns on the gross ticket value than before. For instance, a Mumbai to Dubai Air India tickets earlier fetched a commission of Rs 485. However, now the agent will get Rs 1,200 for booking the same ticket.
Till recently, travel agents were up in arms against the scrapping of the commission and were demanding its postponement till March 2009. ?Travel agents bargained the new fee regime on the premise that agents should get higher remuneration if migration to transaction fee was to be accepted,? said a source in the industry.
Airlines have also conceded to the demand of charging a fee over and above the cancellation charges for any modification or cancellation in the ticket. This means additional revenue for the travel agent.
Meanwhile, as transaction fee comes into being, travel agents associations still remain divided on the issue. While TAAI (Travel Agent Association of India) and TAFI (Travel Agent Federation of India) have agreed to the new regime, IAAI (IATA Agents Association of India) continues its protests against the move.
According to Biji Eapen, president of the 672 member association IAAI, transaction fee will make agents lose their competitive advantage over bookings on online travel portals and airlines themselves.
While airlines offer dynamic pricing, portals have a slew of offers like cash backs and bundled packages, which they compensate through the incentives from the carriers. ?Airfares have already been hiked so many times this year, consumers will not accept the transaction fee regime,? added Eapen.
He says that members of IAAI have already launched a silent protest from Monday which will slowly intensify. ?Post November 1, we plan to stop selling all airlines tickets if the 9% commission is not reinstalled,? he said.
Agents got 9% commission on air tickets before it was shaved off to 5% as a cost cutting measure by airlines.