Emirates cuts travel agents' commission citing volatility in aviation

The airline' half-year profit in FY17 reduced by 75%

Emirates has slashed agents' travel commission from three to one per cent as it looks to reduce its sales and distribution costs.

With over 180 weekly flights, Emirates is the largest foreign airline operating to India and it has over 10 per cent market share of India's overseas air traffic.

Emirates said that it decided to cut commission owing to volatility in global aviation. "Our trade channel will continue to be our prime strategic distribution channel. However, volatility has become the new normal in global aviation. Market, industry and customer dynamics add to complexities of our business. So, as the world economy and industry changes so are we," Emirates Vice-President (India and Nepal) Essa Sulaiman Ahmad said in a letter to travel agents. The revised rate will be effective from April 1.

Travel agents earn a basic commission on sales and productivity linked bonus. Air India and Jet Airways have already reduced basic commission to one per cent. Etihad too gives one per cent basic commission, while many European airlines and Singapore Airlines only pay productivity bonus and do not give basic commission.

Emirates' half-year profit in FY17 reduced by 75 per cent due to overcapacity, a rising dollar and economic slowdown.