Jet might reduce agents' commission

The airline had proposed from April to reduce the commission from the existing 1%

Jet Airways might cut travel agents' commission, as it aims to reduce its sales and distribution expenses and increase the focus on web sales.

The airline had proposed from April to reduce  the commission from the existing one per cent but this was put on hold after agents raised objections, sources said.

“Airline executives informed agents individually about the impending cut. There was no written communication. We have asked the airline to hold a meeting with agents and discuss the proposal, not take an unilateral decision. We also want Jet to settle productivity bonus payments in a timely manner,” said a travel agent, who did not wish to be named.

According to him, Jet contemplated a reduction in the commission rate from one per cent to 0.25 per cent.

Jet’s e-mail response to this newspaper: "We value our partnership with the local travel agency community. We will continue to remunerate our agency partners in accordance with market standards. We remain committed to growing our business in close cooperation with (them).”

Currently, Air India and Jet pay one per cent regular commission.

Productivity-linked incentive is paid only on sale of international tickets. Vistara  introduced a two per cent incentive to all agents last October; earlier, it was only paying productivity bonus to select ones.

Foreign airlines, such as Air France-KLM, Lufthansa, British Airways and Singapore Airlines, do not pay a regular commission. They pay a productivity incentive.

In the December-ending quarter, Jet incurred Rs 545 crore as sales and distribution expense, nearly a tenth of its total expense. In the same quarter in FY15, sales and distribution expense was Rs 510 crore. Jet has been looking to cut this and and grow its web sales with schemes such as 'FareLock' and 'Best Fare Promise'.