eTN, Jul 02, 2008
Indian travel agents have begun reworking their revenue streams after a funds crunch forced three leading airlines to scrap their commission. The aviation industry, struggling to cling on to competitive pricing despite increased overhead costs, is now faced with the prospect of a Rs.80-billion ($1.86-billion) loss because of the recent fuel price hike and inflation. Jet Airways, Kingfisher Airlines and Air India have decided to scrap the five percent commissions for travel agents from Oct 1. The move, say people in the travel industry, will hit nearly 4,000 travel agents across the country whose annual turnover is nearly Rs.360 billion ($8.38 billion). Consequently, this segment is reinventing itself to move away from over-dependence on airlines to new sources for revenue generation, especially in the domestic market. The new survival strategy, say travel vendors, is diversification.
