Air India travel agents open to waive commission

Aug. 11, 2009 - PRLog -- The Travel Agents Association of India says its 2,400 active, allied and associate members may agree to waive the commission charged on Air India [ Images ] tickets booked by agents if the loss-making airline asks for this. The move could save AI about Rs 300 crore (Rs 3 billion) annually.

"If Air India asks us to charge zero commission on tickets issued by us, we could do that to support the airline, provided I get a nod from my board," Taai president Rajji Rai told Business Standard.

On every Air India ticket booked by agents, the airline pays 3 per cent of the ticket cost as commission. The airlines earns around Rs 10,000 crore (Rs 100 billion) a year from ticket bookings.

"We pay Rs 275 crore (Rs 2.75 billion) to Rs 300 crore (Rs 3 billion) as commission amount for booking our tickets," said AI spokesperson Jitendra Bhargava. But, he said, the airline has not decided anything on requesting the travel agents association on waiving the commission.

AI lost Rs 5,000 crore (Rs 50 billion) in 2007-08 and has asked for an equity infusion, and other help, from the government. National Aviation Company of India, which runs AI, has planned a three-phased strategy to start earning profits within 24 to 36 months.

AI also plans to start 54 flights a day as low-cost services under the brand name Air India Express, an international no-frills arm. The airline currently operates about 300 flights a day. The target is to shift 150 flights a day, or about half of AI's domestic flights, in the near future to the low-cost arm.

The government has formed a committee of secretaries to review the restructuring of the airline on a monthly basis. It is chaired by Cabinet secretary K M Chandrasekhar and includes Aviation Secretary M M Nambiar, finance secretary Ashok Chawla and principal secretary to the Prime Minister T K A Nair.

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