Jet Airways may cut travel agents’ commission as it aims to reduce its sales and distribution expenses and increase focus on web sales. The airline had proposed to reduce the commission from existing 1% from April but the plan has been put on hold after agents raised concerns, sources said.
“Airline executives sounded of agents individually about the impending cut in commission. There was no written communication. We have asked the airline to hold a meeting with agents and discuss the proposal and not take unilateral decision. In any case a cut in commission rate will hurt agents. We also want Jet Airways to settle productivity bonus payments in a timely manner,” said a travel agent who did not wish to be quoted.
According to him Jet Airways is contemplating a reduction in commission rate from 1-0.25%. Currently Air India and Jet Airways pay 1% regular commission. Productivity linked incentive is paid only on sale of international tickets.
Foreign airlines including Air France-KLM, Lufthansa, British Airways and Singapore Airlines do not pay regular commission and pay productivity incentive only.
In December-end quarter Jet Airways incurred Rs 545 crore as its sales and distribution expense which is nearly 10% of its total expenses for that quarter. In the same quarter in FY 15 the airline’s sales and distribution expense was Rs 510 crore.
In an emailed response Jet Airways said, “Jet Airways values its partnership with the local travel agency community. We will continue to remunerate our agency partners in accordance with market standards. We remain committed to growing our business in close cooperation with our agency partners.”
