TravTalk India Online Magazine
With airlines offering discounts on their direct booking channels, travel agents are now asking the airlines for discount parity and not just rate parity. Ankit Bajaj, Founder, Chiky Travels, based in Ahmedabad, speaks out after losing a large chunk of clients because of direct discounts offered by airlines.
Hazel Jain
Ahmedabad-based Ankit Bajaj, Founder, Chiky Travels, highlights a deepening issue: airlines offering discounts on their direct booking channels, which includes their mobile application and website. He says agents are losing a large chunk of clients because of the direct discounts offered by airlines.
“If the airlines can offer such discounts to the end-users, why can’t they offer good commission to the registered travel agencies,” he asks. Bajaj says, “Lately, Indigo and Akasa Air have been broadcasting their advertisement encouraging end-users to book their tickets through the airline’s mobile application.
These discounts will not be applicable if they book their tickets with any travel agency.” He explains that the airlines have the mobile numbers of passengers, many of whom are booking air tickets through a travel agency and as per the mandate, the agency has to enter the passengers’ mobile number. Such advertisement is snatching the travel agency’s business. “If this continues, our businesses will have a huge negative impact. If they can offer such discounts to the end-users through their websites and/ or their mobile apps, why can’t they offer good commission to the registered travel agencies. But just to increase their business through apps, they cannot kill another distribution channel. Ultimately, they are snatching my clients. This discount has to be offered via the travel agencies too. We have an option to keep quiet and accept whatever is happening or to represent the issue with these airlines and discuss a mutually beneficial solution,” Bajaj says, adding, “There should be rate parity, as well as discount parity.”
What’s the solution
The consequence of such promotions is that the travel agency will lose business due to parity issues in discounts. Ticketing is the base of many agencies. If this is affected, the business will not sustain resulting in huge unemployment among the trade.
“Everyone in the tourism industry has to represent this issue to all such airlines and ask them to maintain discount parity. All tourism industry associations must represent the issue with a strong follow up, else the existence of all associations is useless or limited to a few things only
– FAMs, get-togethers, no agenda meetings, and bank guarantee. The choice is yours. Either speak and follow up with these airlines, or wait to see your business die a slow death. The airline sales team will equally suffer with unemployment with such discounts, which have no parity.
There has to be a strong representation on this issue from the trade fraternity.
Keeping mum on this issue or accepting everything is not a solution. We will see sustainability and unemployment issues if this continues. My request to airlines is let the business flourish with a level playing forum. These days, even hotels are doing the same and encouraging direct bookings. Let us work together rather than cut out a valid distribution channel,” Bajaj requests.
What TAFI says
This is one of the issues we need to seriously tackle. This issue of airlines offering promotions directly to clients is bothering our members. We have had a conversation with two of such airlines. And both realised that the agents are contributing almost 70-75 per cent to their business while their apps are bringing them less than 1 per cent business. We explained the issue and they understood that it is counterproductive to alienate the agent fraternity when 80 per cent of business is coming from them. They have assured us that when they do offer such discounts, it will be short lived – 2-3 days. They accept the fact that agents are the best distribution channel. We do want to initiate a system whereby all the non-IATA airlines or LCCs should have an agreement with agents. I would recommend our members to have a formal legal agreement with the airline they are doing business with.
