Transaction fee to be levied on air tickets from 1 November

New Delhi: All major Indian carriers, Air India, Jet Airways and Kingfisher Airlines are set to move from a 'commission' format paid to ticket agents to a 'transaction fee' format from Friday night. The transaction fee will replace the conventional 5% commission collected by travel agents from airlines.

International airlines operating on the Indian circuit are also expected to transit to this fee structure soon.

For travellers, this could translate into an extra burden on their tickets, ranging from Rs 350 on domestic routes to Rs10,000 on international sectors. This would be the quantum of fees they will pay to travel agents if they should book their air tickets through them.

In the commission format ticket agents collected their 'commission' on sold tickets directly from airlines and travellers were spared this expense. Now, in the 'transaction' format, a fee will be collected by airlines as part of the ticket price and handed over to the travel agent. Earlier, the travel agent had the flexibility to waive off or reduce the commission percentage, which will not be the case now as the transaction fee is mandatory.

The fee, however, is not applicable for tickets booked directly.

From Saturday,1 November, domestic passengers will have to shell out an extra Rs350 for an economy class ticket, Rs500 for a business class ticket, and anything between Rs1,200 for economy class tickets and Rs 10,000 for first class tickets on international sectors in case they book their tickets through agents.

The system is already in practice with Indian low-cost carriers, such as SpiceJet, Indigo and GoAir.

All three domestic carriers anticipate huge savings, upto Rs1,000 crore cumulatively, on commission payments. Industry experts estimate that Air India and Jet alone could save up to Rs450 crore each on an annual basis through the new system, while Kingfisher could notch up savings of Rs100 crore.