The Hindu Business Line : Fly cheaper as agents do away with transaction fee

Flying from and within India could become marginally cheaper soon. This follows the Travel Agents Association of India (TAAI) deciding on Thursday to discard the fixed transaction fee which is currently being levied on domestic and international air tickets.

“This is not the correct time for levying the transaction fee. We have asked airlines to revert to the commission system which was in place earlier,” the TAAI President, Mr Rajinder Rai, told Business Line.

From November 1, several airlines did away with commission, a move that saw the agents shifting to a fixed transaction fee for every ticket purchased. The transaction fee model saw a flat rate of Rs 350 for every domestic economy class ticket sold and Rs 500 for every domestic business class flight. For international, it is Rs 1,200 for economy and Rs 2,500 for business class.

Sources told Business Line that the transaction fee model did not work for three basic reasons including the fact that the airlines were not maintaining price parity. “We are agents of the airlines and do a service for them. So why should the airline not reimburse us. Besides, the new model was also affecting our reimbursement and cash flow as there was a lag time between us selling a ticket and the airlines paying us,” a travel agent said.

TAAI has also advised its members that they are free to approach the courts or take any other necessary action which would work towards getting their commission scenario back.

The association has also threatened to boycott Kingfisher Airlines from December 1, which it claims is not charging transaction fee on the direct sale of tickets. “This is because they are going against the condition that the airlines need to maintain ‘price parity’ on the tickets sold by them and by the agents,” said Mr Rai.