The Hindu Business Line : Singapore Airlines firm on not paying commission to travel agents

Bangalore, Feb. 3 Despite over 95 per cent of Singapore Airlines’ business in India being generated through travel agents and facing a virtual boycott from the agents, the airline has decided not to budge from its decision to adopt the transaction fee model in India.

Explaining the decision, Mr C.W. Foo, General Manager - India, Singapore Airlines, said: “Agents overseas are recovering their costs by charging service fees on the sale of tickets based on the level of service they provide. It may not be visible to you, but you actually pay more for your tickets so airlines can pay travel agents,” he said.

Service fees are the most transparent way of deciding the service the customer wants to buy, said Mr Foo. “And they help us bring cheaper fares into the market; because we are no longer charging you to pay excessive commissions to agents for service, whether they provide it or not, and whether you want it or not,” he added.

Refuting the claim, Mr P. Sampath Kumar, National Managing Committee Member, Travel Agents Federation of India (TAFI), said: “The commission we demand is for using us as a distribution arm. The commission/remuneration paid to us is for the services we as agents render to them, and not the customer.”

“If they do not pay us commission/remuneration, then the agent-principal relationship is not in place, violating the agreement entered between us, which clearly specifies that the airline shall remunerate the agent for the services rendered to the carrier. If they do not want agents, they should withdraw seat access from the GDS systems and concentrate on selling on the Net,” he said.

Additional cost

He said the airline was charging an additional fee for issuing tickets across the counter at their offices ranging between Rs 1,500 and Rs 10,000, which is not mentioned in the advertisements brought out by the carrier. Besides, when the airline company pays commission to agents in 140 other countries, why not continue the model in India, he wondered.

“We are very clear we do not want to charge the customer for the services rendered to the airline. We may consider charging a fee for planning, execution and delivery of service to the customer as an additional cost.”

However, according to Mr Foo, the airline company is willing to continue its discussions with the travel agents about these changes, and the other incentives that would be put into place, in addition to service fees, to help them.