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| Jet backs down, offers agents 3% commission |
| BS Reporter / New Delhi Dec 09, 2008, 00:30 IST |
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Over 2,500 travel agents and online travel portals started selling Jet Airways tickets again from this morning after the airline, the country’s largest by market share, succumbed to pressure and agreed to pay them a 3 per cent commission
In absolute terms, the commission amounts to a 50 to 100 per cent increase over the earlier arrangement.
Jet earlier paid agents 5 per cent on the basic fare. The new 3 per cent commission covers the entire fare — including surcharges — on all domestic and international tickets. Surcharges account for 70 to 80 per cent of the ticket price.
Jet’s budget airline subsidiary JetLite, however, will continue not to pay commissions.
Jet’s decision follows a four-day India-wide boycott of the airline’s ticket sales by agents and online portals. Although all airlines had stopped paying them commission from December 1, agents chose to boycott Jet because of its size and influence in the industry.
The decision was taken last night at a meeting between Jet executives and travel agents associations like the Travel Agents Federation of India (TAFI).
“The commission scheme will come into effect immediately and will replace the transaction fee model recently introduced,” an official statement from Jet said.
The move, however, does not benefit consumers since the agents have not decided to scrap the transaction fees they were levying in lieu of commission.
“The consumer will definitely get some benefit, but the 3 per cent commission is still not enough and we will have to levy some service charges on each ticket,” said a Mumbai-based travel agent.
Other airlines like Kingfisher and Air India have not yet taken a decision on paying commission.
“We are studying the matter closely and will take a decision tomorrow. We also have to look at the fact that a 3 per cent commission on the total ticket price will mean higher costs to the company,” said Siva Ramachandran, vice-president (global sales), Kingfisher.
Company sources also said they might agree to a lower commission of around 2.5 per cent.
Air India said, as of now its no-commission stance remains. “We will take a decision when our chairman returns,” a company spokesperson said.
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