Jet reverses decision, offers to pay travel agents 3% fee

Jet reverses decision, offers to pay travel agents 3% fee
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First Published: Tue, Dec 09 2008. 12 52 AM IST

Welcome step: Travel agents’ offices in Jalandhar. Travel agents contribute at least 80% of business for airlines. Ramesh Pathania / Mint
Welcome step: Travel agents’ offices in Jalandhar. Travel agents contribute at least 80% of business for airlines. Ramesh Pathania / Mint
Updated: Tue, Dec 09 2008. 12 52 AM IST
New Delhi/Kochi: Four days after India’s travel agents stopped selling tickets of Jet Airways (India) Ltd, the airline has offered to pay 3% commission on airfares, including a so-called fuel surcharge that was not considered while calculating such payouts until 31 October.
Monday’s decision by the country’s biggest carrier by passengers, reverses an earlier decision Jet Airways and other airlines such as Kingfisher Airlines Ltd and state-run National Aviation Co. of India Ltd (Nacil) took to scrap such commissions to agents from 1 November.
Welcome step: Travel agents’ offices in Jalandhar. Travel agents contribute at least 80% of business for airlines. Ramesh Pathania / Mint
By including the fuel surcharge, designed to be a varying levy directly proportional to jet fuel prices and often 30-50% of a ticket’s price, travel agents stand to receive a higher payout even though the proposed commission has been reduced to 3% from 5% before 1 November.
The gross fare for calculation of the 3% commission will exclude airport and government taxes, Jet Airways said in a statement, adding the new scheme takes immediate effect.
Travel agents contribute at least 80% of business for airlines.
Agent respresentatives, who welcomed Jet Airways decision, said they were not giving up a demand to return to a 5% commission regime before the payout was brought down to zero.
“While we are now working on the 3% commission with Jet, we are not going to end this here and will definitely be pushing towards the original 5%,” said Biji Eapen, president of the Iata Agents Association of India (IAAI), which has over 600 members in India. Iata is short for International Air Transport Association, a global grouping of airline and travel firms.
Eapen said Kingfisher Airlines has also agreed to a 3% commission, but no formal intimation has been made, while Nacil, which runs Air India, has asked for a few days to decide.
“We will be planning our strategy for airlines such as Singapore Airlines, Deutsche Lufthansa AG and Qatar Airways, in a day or two,” Eapen added.
A Kingfisher Airlines spokesman said there was “no decision yet” and Nacil executive director Jitendra Bhargav said the airline will study details and take a decision but did not specify by when.
Though JetLite (India) Ltd, the low-cost carrier of Jet Airways, has been kept out of the 3% commission decision, it was not immediately clear if this would apply to other discount airlines such as SpiceJet Ltd and Interglobe Aviation Pvt. Ltd-run IndiGo, among others.
Shares of Jet Airways lost 1.32% to close at Rs134.05 on the Bombay Stock Exchange on Monday, a day the benchmark Sensex index expanded 2.20%.
regina.a@livemint.com
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First Published: Tue, Dec 09 2008. 12 52 AM IST