Taking a cue from international airlines, domestic carriers, Indian Airlines (IA) and Jet Airways, have decided to slash travel agents' commission from March 1. The measure, in line with the airlines' cost-cutting initiative, has left the travel agents' fuming.
The commissions on the dollar tariff has been reduced from 9 per cent to 7 per cent by both airlines. While IA has decided to do away with the 3 per cent sector-linked incentive and offer only 5 per cent commission on the fares, Jet Airways has reduced commissions from 6.9 per cent to 5 per cent.
The earlier commission structure offered by Jet was such that a 5 per cent commission was offered on the basic tariff besides a 2 per cent incentive on the tax component. However, in the recent past, Jet clubbed the two under one head and was offering 6.9 per cent commission which they have now decided to reduce to 5 per cent.
Senior executives at Indian Airlines said, "The move is in line with the cost cutting initiatives being undertaken by our company. The distribution costs have been ballooning whereas the traffic has not seen any significant growth. Hence, we are forced to reduce the travel agent's commission."
Despite repeated attempts, Jet Airways executives could not be contacted. However, sources in the travel industry confirmed the development.
Suresh Bhatija, chairman (aviation council), Travel Agents Association of India (TAAI), said, "We are upset with the change in attitude of Jet Airways and Indian Airlines towards us. This was absolutely unexpected and the airlines didn't even find it necessary to discuss the issue with us as they used to in the past."
This assumes significance primarily because Jet Airways had assured the travel agents that they would not slash the commissions after clubbing the incentive categories under one head, Bhatija added.
This is the second severe blow dealt to the travel agents in recent times. Earlier this year, all international airlines had slashed travel agents' commission to seven per cent from nine per cent, in spite of facing stiff resistance.
