Jet bows to pressure from travel agents, cheaper online fares off

Jet bows to pressure from travel agents, cheaper online fares off
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First Published: Thu, Jan 03 2008. 12 00 AM IST

Same rates: Jet Airways, with a fleet of 75 aircraft, operates over 355 flights a day, serving 55 destinations. (Photo: Madhu Kapparath/Mint)
Same rates: Jet Airways, with a fleet of 75 aircraft, operates over 355 flights a day, serving 55 destinations. (Photo: Madhu Kapparath/Mint)
Updated: Thu, Jan 03 2008. 12 00 AM IST
Mumbai: Passengers travelling by Jet Airways will no longer be able to buy tickets online at rates cheaper than what travel agents offer them.
About 7% of Jet Airways passengers were able to get cheaper fares through online booking at the airline’s website, compared with fares offered by travel agents. In some cases, the difference was as much as 25%.
Jet’s reason to offer lower fares on its own site was to try and reduce costs and agents’ commission. The airline has another website for travel agents, www.9wagents.com. But travel agents were unhappy at the airline selling cheaper tickets on its own website, which they saw as a threat.
Following a meeting with travel agents, represented by Travel Agents’ Federation of India, or Tafi, Jet has agreed that it will not offer cheaper fares on its website.
Same rates: Jet Airways, with a fleet of 75 aircraft, operates over 355 flights a day, serving 55 destinations. (Photo: Madhu Kapparath/Mint)
Jet Airways, with a fleet of 75 aircraft, currently operates over 355 flights a day, serving 55 destinations.
“Having heard the concerns of Tafi, we have decided to maintain parity between our website fares and those that we have issued to travel agents,” according to Poh Leong Choo, a sales vice-president at Jet Airways India Ltd, quoted by Tafi in an internal mail to its members. Choo wasn’t available for comment.
Airlines, especially low-fare carriers, such as Deccan, SpiceJet, IndiGo and GoAir, generally encourage online booking to cut costs.
Overall, 27% of airlines tickets were booked online in the year ended March. Domestic airlines, that have reported a combined loss of $500 million in last fiscal year, are looking at various ways to cut cost.
“More than 7% passengers of Jet Airways book through on-line facility,” says a Jet executive, who didn’t want to be identified. “We stand to gain around $7 (about Rs275) to $8 per ticket, if a passenger is booking online. Since we do not need to pay commission to agents, passengers booking online used to get cheaper fares. We will continue to offer cheap fares for online booking, but there will be no difference between agents and passengers” fares.
Globally, the airlines industry saves up to $3 billion annually by issuing so-called paperless tickets, according International Air Transport Association, or Iata, which represents over 240 airlines that account for 94% of international scheduled air traffic.
“Undercutting of fares...had created troubles for agents,” said Ajay Prakash, national general secretary of Tafi.
“I have faced several instances when passengers dropped me and went for online booking to get cheaper fares. Big corporate houses, too, first check online and demand the same fare (what they get online) from us.”
“We cannot afford to offer the same price,” said Regi Philip, promoter of Cosmos Agencies, a travel agency firm recognized by Iata.
Late Wednesday, Jet Airways sent out an email to its frequent flyers saying those booking online at the company’s website in January will be entered in a lottery where the airline is giving away a BlackBerry phone every day.
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First Published: Thu, Jan 03 2008. 12 00 AM IST