Travel agents and airlines are at loggerheads again. Agents are protesting national carrier Air India's move to offer cheaper fares exclusively on its website.
Travel agents associations say this practice amounts to "dual pricing'' and is hurting their business, and have approached members of Parliament and state legislators to take up their demand of restoring five percent commission from airlines and price parity.
Dual pricing refers to sale of cheaper tickets at fares through airline's website. These fares are not available on any other global distribution channel used by the agents. Currently, Air India is selling tickets priced about 5-10 percent lower than the fares available on global distribution systems.
Travel agents form mainstay of sales and distribution networks of legacy airlines with over 70 percent of business coming from them. Air India has been pushing to increase its web sales which currently account for about five-seven percent of total sales. Increasing sales through the company website also reduces its distribution costs but this has pit the the airline against the agents.
“Dual pricing creates conflict of interest with travel agents. There has to be parity,” says Pradip Lulla, general secretary of Travel Agents Federation of India. To illustrate by example, Lulla says dual pricing is akin to a footwear chain or an apparel chain offering discounted price only in one of its outlets.
Sources said Air India is offering Mumbai-London one-way fare at Rs 27,417 on its website. On the distribution system used by agents the lowest fare is Rs 29,584. Emirates is also said to be offering a web fare which is slightly cheaper than one sold on global distribution systems.
More From This Section
Iqbal Mulla, president of the Travel Agents Association of Indiam (TAAI), says the airlines are trying to control distribution network by resorting to such practices. "Every one is asking for cheap fares. There is an intense competition and so the airlines are trying to attract customers to their websites. We are airlines' partners and small and medium agents account for bulk of airline sales but are facing the pinch,” he said.
“The airlines are confusing passengers by offering such discounts,” he said. TAAI has written to all MPs and legislators across India and urged them to take up the travel industry demands with the civil aviation ministry.
Air India and Emirates did not respond to email queries requesting comments.
An Air India executive said: "Globally, airlines are switching to web sales. There is nothing new in that. Website sales account to five-seven percent of our total sales. It is not a bread and butter issue as is made out by agents.'' He said the agents themselves needed to stop the practice of under-cutting on airline's fare before pointing fingers.