Low-cost carriers SpiceJet and GoAir have agreed to pay booking agents a minimum transaction fee of two per cent starting June 1, a move that could lead to a proportional increase in fares.
The new transaction fee, which would be applicable on the base fare and fuel surcharge, is to be inbuilt in the final airfare starting June 1, the Travel Agents Association of India (TAAI) said. The fee will be credited in the following month to the travel agents.
“Currently, the agents charge a separate fee as commission or service charge. This was a deterrent as people do not wish to pay anything higher than the final price. The remuneration to the agent will now be included in the ticket price itself,” said Zakir Ahmed, President of Travel Agents Federation of India.
Neelu Singh, Chief Operating Officer of Ezeego1.com, said: “Given that all players are working hard to boost their profit margins, this indeed is heartening news for the entire travel agent community. The travel agents give specialised advice to travellers and are entitled to remuneration.”
What this means is that tickets bought from a travel agent could become dearer. “If the airline website shows the price of a ticket as ₹5,000 and the same is bought from an agent then it may cost ₹5,100.
However, let us not forget that airlines charge a convenience fee on an online transaction,” said Harmandeep Singh Anand, Secretary General of TAAI and Managing Director of Jagsons Travels.
TAAI said that it would seek higher transaction fees from the two carriers. Several international airlines such as Emirates and Cathay Pacific pay commission of over 5 per cent, said Ahmed.
Higher transaction feesThe issue of transaction fee has been a contentious one for the last few years. In January 2013, the Supreme Court had said a transaction fee could not be collected from passengers in any form until the Civil Aviation Ministry took a final decision on the issue.
In September 2013, then Civil Aviation Secretary KN Srivastava said in an order that airlines can charge a transaction fee but that the amount should be a part of the airfare and not outside it.
Further, he added that transaction fee, commission or convenience fee were all the same — payment of remuneration to an intermediary. Following the decision, Indigo brought back the transaction fee model in January 2014.