With zero commission, customers will have to book online or directly at the airline’s office. Of course, they can still tap their travel agent, who may demand a transaction fee.

Predictably, the airlines’ decision has left travel agents fuming. “In 2001, the commission was 9 per cent. In 2002, it was cut to 7 per cent and then to 5 per cent in 2005 with a promise that airlines would not touch commissions for another five years. They have gone back on their word,” said Praveen Chugh, president of TAFI. Travel Agents Association of India (TAAI), IATA Agent Association (India) and TAFI together represent the 4,000 travel agents.

“This will wipe out the 3 per cent commission agents make on airline bookings. We will have to charge a transaction fee from the customer now, but he won’t be willing to pay much,” Chugh said. Globally, airlines do not pay commissions, but agents charge a transaction fee from customers.

“Agents in India have been getting handsome fees for doing next to nothing. An executive who wants to travel first class to New York asks an agent to book his ticket. The agent pockets Rs 22,500 as commission on the Rs 4 lakh ticket,” an airline source said, explaining the rationale behind the move.

5 per cent The commission airlines pay agents for selling their tickets

Rs 1,500 cr The amount Air India-Indian, Jet and Kingfisher will save annually after axing commission

4,000 Approximate numer of travel agents in the country

... contd.