Mumbai: Singapore Airlines, one of the international carriers operating out of India, has decided to stop three flights per week from Mumbai and Delhi while Indian travel agents have stopped selling this airline’s tickets.
In response to the airline’s move to abolish a 5% commission on tickets sold, leading travel agent associations have stopped selling tickets of Singapore Airlines and its sister carrier SilkAir from 1 January.
Three Indian carriers—National Aviation Co. of India Ltd (that runs Air India), Jet Airways (India) Ltd and Kingfisher Airlines Ltd—had rescinded their earlier decision to abolish the commission and agreed to pay 3% of the gross fare, excluding government taxes.
The Dubai-based Emirates Airline, on the other hand, had decided to continue paying 5% commission.
Starting 1 November, domestic and international carriers stopped paying commission to travel agents.
They tried to persuade the agents to charge a transaction fee for every ticket sold in line with international practice. After protracted negotiations, domestic carriers and a section of international carriers retracted from their stance to abolish travel agents’ commission.
Iata Agents Association of India (Iaai) president Biji Eapen said travel agents will harden their stance against Singapore Airlines from next week. “The load factor of Singapore Airlines has already fallen by 50-60% and the carrier has been forced to discontinue certain flights. We are closely monitoring issuance of tickets by agents and online travel agents,” Eapen said.
However, Singapore Airlines’ general manager for India C.W. Foo said there was no fall in load factor and discontinuation of flights had nothing to do with travel agents’ boycott. It was a part of an overall review of the airline to meet the current demand.
Singapore Airlines, which started operations from Chennai in 1970, operates 56 weekly flights to Singapore from eight Indian cities. According to Foo, there is no change in the airline’s stance of abolition of travel agents’ commission in India. “Singapore Airlines’ outlook in India continues to be positive. The information about 40% load reduction is not true,” Foo said in an email to Mint.
“There will be a temporary reduction of one flight per week from Delhi between 22 January and 25 March and two flights per week from Mumbai between 27 January and 26 March. This is part of the overall network wide review undertaken by our head office to adjust the capacity in the short term to current demand; including flights to East Asia, Australia and Europe.”
Ahead of rival carrier Kingfisher Airlines launching Singapore operations next week, Singapore Airlines has announced a special promotional fare for flying to Singapore for Rs16,830, South-East Asia (Kuala Lumpur, Penang, Bangkok, Denpasar, Langkawi and Kuching) for Rs23,980 and Australia for Rs41,350 from India. The special offer is inclusive of taxes and surcharges.
A Mumbai-based travel agent, who did not want to be identified, said Singapore Airlines is now wooing agents with incentives such as productivity-linked bonuses after the boycott was announced.
“The withdrawal against Singapore Airlines is complete. There were very few cases of issuing Singapore Airlines tickets after boycott decision on 1 January. Though there have been a few cases of ticket issuance by some portals, travel agent associations are taking measures to arrest this trend,” he said.
National general secretary of Travel Agents’ Federation of India Ajay Prakash said, “Singapore Airlines thought they could sell their seats without travel agents and look where it’s leading.”
According to travel agents, Deutsche Lufthansa AG and Japan Airlines Corp. had abolished commission while British Airways Plc., Gulf Air, Oman Air and Saudi Arabian Airlines continue to pay 5% commission.
Singapore Airlines currently operates two flights a day from Mumbai and Delhi; seven weekly flights from Chennai and Bangalore; four weekly flights from Kolkata and Hyderabad and three weekly flights from Ahmedabad.
Its subsidiary SilkAir, a regional airline, operates daily flights from Kochi, four weekly flights from Thiruvananthapuram and three weekly flights from Coimbatore.