Airlines charge extra to keep up with agents

For some time now, the airline ticket booking business in India has going through turmoil. As airlines are facing a tough time financially, they have told agents that tickets booked by agents will no longer get commission to the agents. The way that the business used to go was, when a ticket was booked by an agent for an airline, the agent used to get a commission for the booking, approx Rs. 350 to Rs. 500. But with the decision to do away with the commissions, airlines faced a revolt from these agents who threatened to boycott them. Having said that, consumers should have benefited from this decision, since the fee should now be deducted from the airline tickets. However, in an unprecedented action, airlines are still charging consumers the same amount, apparently under pressure from agents who don’t want airlines to start selling at a reduced rate, even if the tickets are being sold directly:

Aviation fuel may have got cheaper on Saturday, but flying has become much more expensive. India’s three full service airlines — AI, Jet and Kingfisher — started levying a transaction surcharge on tickets sold by them. This surcharge is exactly similar to the fee that agents now charge — Rs 350 and Rs 500 for economy and business-class domestic flights and between Rs 1,200 to Rs 10,000 for international ones.
This means that there’s no escaping this additional charge whether people buy tickets from agents who moved over to the new system after airlines stopped paying them any commission from Saturday, or directly from the carriers. A senior airline official claimed that this was done under pressure from travel agents. “Agents told us that if we sell tickets cheaper than them, agencies would find it hard to get business. So we had no option as 85% of all tickets are sold by agents and they have threatened to boycott the three biggest Indian airlines,” the official said, clearly happy that airlines will pocket this entire amount.

This is an act that is vehemently anti-customer. If the airlines are having a commercial dispute with their agents, why should the customer have to pay extra; the airline is happy since it gets additional payment. The agent is happy since there is no under-cutting of their business and customers don’t feel any difference between buying the ticket from the airline and from the agent.

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