The travel agents appear to have won Round 1 of the “Zero Commission” battle. Less than four days after the agents decided to boycott Jet Airways and low cost subsidiary JetLite, Jet Airways announced restoration of the travel agents’ commissions.
As per the release from Jet Airways,
Recognizing the difficult economic environment for the travel industry as a whole, Jet Airways engaged in a constructive and intensive dialogue with the Travel Agency Associations to find solutions acceptable to the airline and the partners in the travel trade. As a result of this dialogue Jet Airways has agreed to pay three percent commission on gross fare (defined as basic fare plus fuel surcharge) of domestic and international tickets sold in India. The commission scheme will come into effect immediately and will replace the transaction fee model recently introduced.
JetLite will continue with the practice of transaction fee model consistent with the practice adopted by the other Low Cost Carriers (LCC’s).
As I had indicated in my earlier story, the travel agents will next focus on Kingfisher Airlines. Expect a similar announcement from Kingfisher very soon. The big question will be Air India, since Air India controls the bank settlements system that agents rely on to book tickets and settle accounts with all the airlines.
As the Chinese say, may we live in interesting times.