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Thursday, 07 September, 2017, 17 : 14 PM [IST]

Metamorphosis of Travel Agents

Over the years, the travel & tourism business has changed rapidly, and so has the travel agent or the ticketing agent community. Through their existence, agents have faced several challenges, especially over the last decade. Akansha Pandey provides an overview.
With time, the business models of ticketing agents have seen a dramatic change in the last few years. Things have become easier as regard to issuing tickets, calculating fares, checking flights as everything is technology based & automated and the fares are guaranteed by CRS/Airlines. In earlier times fare calculation was an art by itself. Jyoti Mayal, Director, New Airways Travels (Delhi) recalls how earlier, in peak seasons due to rush they used to work round the clock to issue tickets there used to be a queue of people waiting to collect the tickets.

But now with technology, it is a faster process and less time consuming and due to e-ticketing no physical collection is required. However, the advent of new, disruptive technology has changed the whole business paradigm, wherein travel agents are no longer the sole custodians of travel-related information. Everybody who can access the internet feels that they are an expert!

Today, the travel trade faces many such challenges to its growth and eventual prosperity. An agent’s survival solely on ticketing business is a dream today and thus agents have diversified into other verticals of foreign exchange, hotel bookings and tour packages, she said adding,

“As a domain for doing business only under the vertical of ticketing the business has seen a great shift. No agent can survive in the right professional way by doing only ticketing. It is a package which needs to be put in place so that hotels, visa, transportation, foreign exchange, etc., all get bundled together. Even OTA’s are now concentrating on all services.”

Lack of Regulatory Body
Travel agents’ relationships with airlines and the International Air Transport Association (IATA) have changed radically through the years, recalled Ajay Prakash, Chief Executive, Nomad Travels and former President, TAFI. There was a time when agents acquired IATA accreditation and signed a Passenger Sales Agency Agreement which stated that 9% agency commission would be paid for international ticketing, and agents were not allowed to discount from that commission (commission for domestic tickets ranged between 6-9% and it was determined bilaterally between individual airlines and agent associations). There was a gentleman hired by IATA who used to visit agencies and airline offices incognito and attempt to buy tickets and ask for a discount as a test case. If he was given a discount, that airline or agency was blacklisted by IATA. There was a system in place to ensure a fair deal for the distributor or the agent; discounts by agents or airlines were frowned upon.

But today’s scenario is completely unregulated. The Directorate General of Civil Aviation (DGCA) has abdicated its responsibility of monitoring how the business of civil aviation is conducted in the country. It has limited itself to certifying airports, crew, aircraft and flight duty time limitations. There is nobody who is looking at the commercial aspect of civil aviation – unlike the TRAI or the IRDA for the telecom and insurance sectors, respectively. IATA too has stopped playing the role of monitoring and regulating the business of air travel; it says it has nothing to do with the commercial aspect of civil aviation and it is up to airlines and agents to decide individually. IATA today has become a mere money collection and distribution centre with scant regard to the fairness of the entire operation.

A state of slightly uncontrolled anarchy is ruling the market today. Online Travel Agencies (OTAs), for instance, are a recent phenomenon and have captured a big per cent of the domestic air ticketing market. Such non-transparency and arbitrary display of fares hurts the consumers.

Commission Woes
Since past many years, the IATA travel agents fraternity in India is being plagued by the denial of agency commission (2008), imposition of the Ticketing Authority Process (TAP) (2010) and the Weekly Payment System (WPS) (2012). All these can be attributed solely to the airlines’ lack of empathy with their own appointed travel agents cum business partners, lamented Biji Eapen, Vice Chairman and MD, Speedwings Travel & Cargo.

Though Indian Aircraft Rules 1937 have the precedence over the rights and obligations over the IATA (hierarchy of sources), the biggest challenge to the ticketing segment is the sluggishness on the part of DGCA, the Government of India’s regulatory authority, to execute and implement their own Rules – the travel agents’ statutory right for “Remuneration.” While denying commission to their appointed travel agents, the airlines continue to indulge the consolidators by paying them PLBs and allowing them to monopolise and control the Indian travel market.

If the present situation is allowed to continue, the outlook is very bleak for the IATA travel agents in India whose role will become minimal with the introduction of IATA’s New Distribution Capability (NDC). If IATA Agents Association of India (IAAI) attempts to get IATA to re- constitute APJC-India succeed, and provided all the Travel Agents Associations unify, it will enable the industry to achieve the common goal of cleaning up and eradicating all the evil activities introduced by the vested interests through APJC-India and also implement the Default Insurance Programme (DIP) that will allow the travel agents better viability and flexibility to do business.

Challenges Galore
The ticketing business is a naked industry where even a rare traveller knows the cost today. There should be an MRP of each sector where product and our profits should be protected by the main supplier. Even in the payment cycle, ticketing is the only industry where there is no credit system of paying in installments. We are already on zero protection from airlines and zero credits, but as ticketing has been our core business, it is difficult for us to diversify, highlighted Mayal. All ticketing agents need to diversify and need to add more services and try to undertake direct buying from their suppliers to have a better remuneration and recognition. They need to come across as Travel Advisors/Consultants and not ticketing agents. They need to have a proper know how of the products besides tickets which they are offering their clients. They need to believe in themselves and their knowledge and charge for their role as a consultant. Advice for free never has a premium or importance, says Mayal.
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