The Official Voice Of Etaa

Opening New Avenues For The Sub-Agent Segment

Non-IATA Agents Lose Out To Low-Cost Carriers

S Nithya Kamakshi - Chennai

The airline industry is abuzz with many low-cost carriers taking to the skies. The entry of low-cost carriers like Air Deccan and SpiceJet is being greeted with considerable enthusiasm by the middle-class traveller. While India has a population of over 1 billion, only about 15 million passengers travel by air. This is expected to double in the coming year with more low-cost carriers foraying into the market. The good news is that fares are steadily moving downwards. The bad news: non-IATA agents are losing out on the new trend. How much opportunity does a non-IATA agent foresee in low-cost airlines? ‘Not much’, is the general response of the sub-agent community.

According to Ganesh, manager, Fortune Travels, "The retention rate is very low as far as the low-cost carriers are concerned. The booking patterns are different and it is mostly done through the Internet. Due to the Internet traffic we do not get timely access to the Net and lose out on customers. Moreover, the customers have the option of booking the tickets online and we often land up losing." However, Hari, proprietor, Kaveri Travels, was undeterred by the rapid changes in the travel industry. "Private carriers like Air Deccan and SpiceJet have targeted specific segment of travellers. We neither lose much nor gain much through this. We still have a regular stream of travellers who do not have the time to book tickets on the Net and leave it open to us."

Sundar of Agash Travels feels that the low-cost carriers do not benefit sub-agents in any way. “The sub-agents land up losing on their commission rates as the tickets can be booked and downloaded directly.” Rasik Bhai of Elite Tours and Travels reiterates, “It’s true that most of these low-cost carriers use the sub-agents for their distribution, but we hardly benefit from this. We foresee very little opportunity as our commission is low and it consumes a lot of our time to download tickets from the Net. Moreover, travellers prefer to book online on their own instead of depending on us. This scenario is biting into our business and is in no way benefiting us.”

“Travellers feel that booking through a travel agent will cost them an additional 5 per cent. It’s ultimately the non-IATA agents who lose out on the commission and on regular customers,” says a perturbed Unnikrishnan, MD, Khushi Travels.

Low-cost carriers in fact have fares that are close to upper-class train fares on some sectors. 'Book early, book online and book directly with the airline' is the motto of frequent travellers on these airlines. But what happens to the non-IATA agents who lose out on the commission and the business? Will they be able to sustain?