 "Vistara sweetens deal for agents, offers 2% commission")
Nine months after its launch, Vistara has introduced a two per cent commission for travel agents. The incentive will help the airline fill up its flights, which have average loads of 60 per cent. This is far below the industry average of 82 per cent during January-August.
Like its parent Singapore Airlines, Vistara followed a zero commission policy till now and gave select agents a three per cent productivity-linked bonus, which is related to sales targets. But, in view of low volume and expansion of routes, the Tata-Singapore Airlines joint venture carrier has revised its policy.
ALSO READ: Vistara might cut business-class seats
The airline will now offer commission, which the airline terms ‘marketing fee’, to agents across the country without linking it to a sales target. Vistara has also expanded its network of agents.
“With introduction of new flights to Bhubaneswar and Varanasi, the airline needs to expand its trade partners. Vistara was offering productivity bonus to select agents and there was no incentive for the others to sell its tickets,” said an aviation source. Agents covered under productivity bonus contracts will earn marketing fee, too, but the overall payout will be capped at three per cent.
“Commercial arrangements between our agents and us are private and we do not wish to comment on it,” said a Vistara spokesperson in response to an e-mail query. Currently, Air India and Jet Airways give one per cent regular commission to agents on domestic sales; they give productivity bonus only on international ticketing.
Low-cost carriers (LCCs) in India allow agents to issue tickets after collecting an advance from them. Agents receive an incentive over such deposits. Agents are also allowed to charge a transaction fee from customers and are paid productivity bonuses by LCCs on meeting their sales targets. While Vistara has received high loads in economy class and there is a pick-up in premium economy seating, the airline’s business class has poor loads. The airline has been carrying out promotional offers such as free premium economy ticket with a business-class ticket to push up sales.
Apart from a marketing fee, Vistara is also offering agents incentives for pushing sales on its flights from Delhi to Ahmedabad, Bengaluru and Bhubaneswar. Incentives include a free business ticket for every 10 business class tickets sold on these routes. The scheme is valid till October-end.
Vistara launched operations in January and now flies 293 weekly frequencies to 11 destinations. From October 21, it will launch flights to Varanasi. Vistara has seven Airbus A320 planes now and will add another two aircraft by 2015-end.
The airline management is considering changes in configuration of planes, which it will induct next year and the changes could include reduction of business class seats from 16 to eight.
The airline is likely to keep constant the number of premium economy seats and plans to increase the number of economy class seats.
At present, Vistara has a configuration of 16 business class, 36 premium economy and 96 economy class seats.
GOOD NEWS
-
Incentive to help the airline fill up its flights, which have average loads of 60%
-
Vistara had been following a zero commission policy
-
In view of low volume & expansion of routes, the JV carrier has revised its policy
- It is also offering agents incentives on its flights from Delhi to Ahmedabad, Bengaluru & Bhubaneswar
