Faced with the prospects of a staggering Rs 8,000-crore loss this year, Air India-India, Jet and Kingfisher have, in a bold move, decided to do away with the 5 per cent commission they pay agents selling their tickets from October 1. While it is not certain if airlines will pass on the savings to passengers, it will certainly deal a massive blow to some 4,000-odd travel agents with annual billings of Rs 36,000 crore.

Emboldened by the dramatic rise in Internet penetration and online bookings, the move by the Big Three will save them about Rs 1,500 crore a year. Jitendra Bhargava, executive director (corporate communications), Air India, confirmed that his airline had informed all three Indian travel agent associations. “Distribution costs account for 4 per cent of our operating expenses of Rs 16-17,000 crore a year. By eliminating commissions, we will save Rs 700 crore a year.”

Kingfisher Airlines and Jet Airways were not available for comment. But Travel Agents Federation of India (TAFI) confirmed it had received a formal letter from both these carriers too on their decision to eliminate commissions.

Agents, on their part, have hit back saying they would not book international flights for customers through Air India and Jet, which together have a 40 per cent share of the international market from India. Instead, they will book flights with international operators who still pay them the commission.

At present, 90 per cent of ticket sales for full-service carriers such as Air India-Indian come through agents. This is because agents pass on a part of the commission to customers as discount, making tickets booked through them cheaper than those booked directly with the airline.

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