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Jet Airways has agreed "in principle'' to allow agents to use credit cards to book tickets and restore price parity in tickets sold on website and reservation systems used by agents, an industry source said
Senior executives of the airline met representatives of Travel Agents Association of India and Travel Agents Federation of India in Mumbai on Tuesday to resolve contentious issues. The two sides also discussed the travel agents demand for restoring 5% commission on regular sales (from current 1%) but the airline gave no commitment on the issue, a travel agent who participated in the meeting said.
Over the last few months the agents have been demanding that the airline increase remuneration as margins in the business have come down. The agents did voluntary shut down of trade for a day in April and also met airline chairman Naresh Goyal last month seeking higher commission.
"The airline executives agreed in principle to allow agents to use credit card but now modalities have to be worked out,'' the agent said. One of the reasons why agents have been insisting on use of credit card booking is that it gives them 40-50 day period to make payment to the bank. Jet Airways and few other airlines discontinued the practice because the airline had to pay merchant charges to banks said to be 1-2% of the transaction and this meant lower net revenue.
The other demand pertained to price parity. Agents demanded that Jet should not restrict promotional discount offers to its website and the same should be opened up for sale even on reservation systems used by agents. The agents have been complaining of loss of business due to sale of promotion fares on airline websites.
Last month Jet's senior vice president and board member Gaurang Shetty wrote to the agents that the airline was committed to involve travel agents to increase business and the perception that it wished to do away with agents was untrue.
"The challenge we face as an industry is that consumer behaviour /needs combined with technology changes have altered the way our business is being transacted in all customer segments.This has affected us in the travel trade (airlines included) and each one of us in the trade have little choice but to reinvent ourselves in the way we all market and distribute our products at the lowest unit cost. This has been compounded further with demand/supply equations changing, airlines yields constantly under pressure, costs increasing across major elements and even factors that are beyond our control,'' Shetty wrote in his letter.
