Channel Chat

The Official Voice Of ETAA

Sub-agents need to explore other avenues to survive

Gayatri Vijaykumar - Bengaluru

Dipping commissions and diminishing margins remain the main issues faced by sub-agents today. In order to tackle them and ensure that the business survives, most sub-agents have realised that ticketing alone will fetch them no profits.

They have therefore started to rely on providing alternate services like car rentals, holiday bookings, travel insurance and foreign exchange. Krishnaprasad, director of Amazing Global Journeys based in Bengaluru, says, "We deal with international and domestic ticketing and are getting an increasingly thinner margin. In a scenario where commissions have disappeared completely, we would have to consider getting into other niche areas of the travel industry such as MICE."

Nikhil Reddy, managing director of Travelcom Worldwide, agrees. "We earn around 4.5 per cent commission of the basic fare on the tickets we issue. This does not constitute any earnings at all. A sub-agent will not survive purely on ticketing unless they sell airline tickets upwards of Rs 50 lakh a month," he says. According to him, Travelcom does not rely on ticketing at all. "We earn a lot from hotel bookings, car rentals and close to 25 per cent of our revenue comes from selling travel insurance. We do not target companies but focus on individual travellers," Reddy explains.

Getting an IATA accreditation is not a very easy process. Therefore, some sub-agents like Travelcom prefer not being accredited. Reddy explains, "In case I apply for an IATA accreditation, I would have to ensure that my staff is also IATA-qualified and that is expensive. I would also have to ensure that I keep a ticket stock with me. I would end up spending two per cent of what I earn on infrastructure alone."