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New Delhi, Sep 11: With the November 1 deadline for airlines’ imposing the 0% commission regime around the corner, travel agents are considering the possibility of levying a transaction fee on booked tickets from customers. Industry sources say this fee will range 3-5% of the airfare. However, compared to 5% commission that agents received on basic fare, the said transaction fee will be imposed on the complete fare (including the fuel surcharge). This will effectively make air travel dearer for customers.
“Instead of imposing a flat transaction fee, we are considering a 5% service charge on total airfare,” said Rajinder Rai, vice-president, Travel Agents Association of India. Airlines and travel agents had set up a committee to find an alternative to the existing commission. The two sides are expected to meet on Friday to discuss the issue.
A spokesperson of Air India said that airlines will leave the decision of levying a transaction fee on the entire airfare with travel agents. “Market dynamics will further decide the quantum of the fee,” he added.
In India, basic fares for business class have gone up by 7% compared to the previous quarter while full economy fares have increased by 6%, according to the second quarter American Express Asia Pacific Business Travel Monitor report. Though crude prices have dipped below $100 a barrel, there has been no slash in airfares. Travel agents are demanding that the transaction fee be printed on tickets along with other components of air fare; this is being evaluated by the committee as well.
Keyur Joshi, COO and co-founder, Makemytrip.com said that there could be a different fee structure for international and domestic airfares. There could be a flat fee structure for domestic routes, while international air tickets could entail a 5% service fee.
On whether this would be levied on the complete fare, Joshi said, “The ministry is trying to club the basic fare with fuel surcharge. If that happens, transaction fee will be levied on the entire fare, else it will be charged on the basic fare.” Currently, Air fare comprises basic fare, fuel surcharge, passenger service fee and congestion fee.
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