AI to pay agency commission, additional Rs 450-cr burden likely

National carrier Air India has agreed to pay a 3% commission to travel agents on ticket sales following the footsteps of private airlines Jet Airways and Kingfisher.

"We have agreed to pay a 3% commission to travel agents," an Air India spokesperson told PTI here today. The commission would be effective from tomorrow.

"The decision to pay a 3% commission to travel agents is likely to put an additional burden of Rs 450 cr annually on the airline," an official said.

Air India was the first domestic air-carrier to announce withdrawal of the earlier 5% agency commission from October 1.

However, widespread protests from travel agent bodies forced the airline to first defer the decision to November 1, and then resume it from this month, albeit with a lesser percentage.

Air India, whose losses for the previous fiscal are estimated around Rs 2,400 crore, had decided to cut costs and arrest its mounting losses in the wake of high ATF prices at that time.

Following its decision, private air-carriers, Jet Airways and Kingfisher Airlines, too had announced withdrawal of commission.