The Hindu Business Line : Air travel could become more expensive

New Delhi, Sept. 16 Air travel could become more expensive in the coming days, following discussions between travel agents and the representatives of various airlines — including Jet Airways, Kingfisher and Air India — in Mumbai last Friday.

The travel agents proposed that a transaction fee of Rs 350 be levied on every domestic economy ticket issued, while a fee of Rs 500 be levied on every business class ticket. The transaction fee will be in addition to the cost of the ticket and will be reflected as other charges (OC).

On the international sector the travel agents are suggesting that a transaction fee of Rs 2,500 be levied on travel to the US, Canada and most parts of Europe, also popularly known as Traffic Conference 1 and Traffic Conference 2 areas. Travel in the economy class to the Far East could go up by Rs 1,200 if the proposals are accepted by the airlines.

Similarly, travel in first class to the US and Canada would attract a transaction fee of Rs 10,000. The proposal to charge a transaction fee could work out to be on similar lines of the taxes that a customer visiting a restaurant has to pay over and above the cost of the food.

Under discussion

The travel agents’ federation has sent out an e-mail to several of its members pointing out that the airlines have conceded to the most important demand — to reflect the transaction fee in the OC column till December 31 next year.

A senior office bearer of the travel agency federation confirmed to Business Line that discussions with airlines had concluded, but refused to share details of what had been approved saying this had to be agreed to by the various federation members first before any statement could be made to the media.

This is, however, contested by the airline community, which while confirming that discussions have taken place say that more talks have to be held before a final decision on by how much and from when the transaction fee will be imposed.

The decision to impose a transaction fee comes as the global airline industry is moving towards a zero-based commission regime for travel agents.

Keeping in mind international trends, several airlines have already indicated that they will move towards zero commission from later this year.