Guldeep Singh Sahni, President, OTOAI, says, “Most of the tour operators and outbound agents have been working with Emirates as it has great connectivity to all the destinations that they are selling. On top of it, the 3 per cent commission was a great attraction. However, now after the commission has gone down, the cost of the package would go up and tour operators would tend to pick up other airlines for their clients. I find it difficult to understand that when most of the airline tickets are sold by ticketing agents and tour operators, why do the airlines do not think that it’s justified in rewarding them with commission?

M.P. Khanna, Managing Director, Diplomatic Travel, says, “We have been working very closely with Emirates for many years. However, reducing its commission from three per cent to 1 per cent would affect its business as it would now go to other airlines. However, while reducing the commission of agents, Emirates will be offering reduced fares online, which creates a difference from the prices on the GDS, and would affect our business too. When the customers will go online, they would go for cheaper fares. The business class and first class product of Emirates is not cheap, and hence there could be a loss. However, everyone in the business tends to be selfish. If we won’t get as much commission as we used to get earlier, we would divert our clients to airlines that offer us decent commission. When Emirates took the decision, they did not consult their trade partners who promoted them for years. Now, there would certainly be a loss of business to them.”

Rajan Sehgal, Chairman, Northern Region, TAAI, says “Emirates is expanding its network fast and already has the largest number of flights, amongst all the international carries, flying to and from India. All this is because of the support of the travel agents. Agents in India have been marketing, selling, bringing customers and giving credit to them and paying the airline in time. Emirates does not understand that this could negatively impact the business. Offering 3 per cent commission on the basic fare is only peanuts for Emirates, but it is still following suit as other international airlines. Withdrawing this commission is not a good sign. However, they would soon realise that travel agents are important for the business. the Indian travel industry, unlike in other nations, is not very strong and has no support from the government. Hence, everybody is cutting the profit of the travel agent, but they will soon realise that travel agents are a major contributor to their business.”

Disappointed by the latest circular by Emirates to cut down commissions to one per cent, Rajat Bagaria, Committee Member, The Travel Agents Federation of India (TAFI), says, “Airlines should be encouraging their travel agency sales force rather than disarming them. Agents always considered EK as an agent-friendly airline, and we rewarded the airline with load factors from all the cities. However, this move brings them at par with other airlines. This comes at a time when the summer season is about to begin, and when we are already reeling under the Service Tax amendment impact. Coupled with the reduced commission, the web disparity, and direct promotions to the frequent fliers and corporates, the margins of the agents will be drastically hit. I hope they have call centres well equipped to handle customer calls and complaints.”

A torchbearer for the eroding agency commissions in India, Biji Eapen, National President, IATA Agents Association of India (IAAI) reacts sharply to the news. He says, “Needless to say, this has come as a rude shock to the accredited travel agents fraternity in India as it is solely their market support that has placed Emirates above the national carrier in the Indian skies. The matter is being discussed with our National Management Committee and a formal request will be sent to Emirates to retract its decision.”

Reacting to this ongoing tug of war between airlines and travel agents, M.P. Joy, South India Chapter Chairman, Enterprising Travel Agents Association (ETAA) and Director, Voyargo Vacations in Bengaluru, says that in the process of distributing air tickets of various airlines, agents incur overheads of managing office, staff, etc. which are increasing every day. “In any business, the facilitator/agent must benefit so that the system works smoothly. I wonder why the airlines are reducing commissions to travel agents when they are the ones to benefit from the travel agents. Any effort in any business should be appreciated with adequate compensation to take care of the expenses as well as margins. It is unfortunate that airlines are not supporting us.” He adds, “Airlines should extend at least five per cent commission to authorised travel agents who support them.”

Reacting to the announcement made by Emirates, Sunil Kumar, National President, Travel Agents Association of India (TAAI) says, “Not only is this an unfair move but also a move that has come at the wrong time. Travel agents have always supported Emirates in a big way by promoting them to their customers. As a result of this move, Emirates will lose its edge as agents will now move to other airlines. After all, why would anyone want to push a product that doesn’t give them any benefit? So, this move will not only hurt the agents but also the airline. The airline has also timed it badly as agents had already committed to a price structure for future bookings beyond April 2017. This abrupt announcement will hurt the agents a lot as the main season starts from April onwards. We were still recovering from demonetisation when this is announced. The team at TAAI is currently discussing what the association’s response to Emirates should be.”

Another large international airline has decided to cut its distribution expenses by revising its travel agent commission from the current three per cent to one. In a letter issued to the travel agents and signed by Essa Sulaiman Ahmad, Vice President – India and Nepal, Emirates, the airline states, ‘…volatility has become the new normal in global aviation. Market, industry and customer dynamics add to the complexity of our business. So as the world economy and industry changes, so are we. Effective April 1, 2017, Emirates in India will revise the standard IATA commission  from current 3% to 1%. All tickets issued prior to April 1, 2017, will continue to attract the current 3% standard commission. We do understand that this move may require a change in your business model, but we hope together, we can emerge better and bigger.’ The letter ends with ‘Assuring you of our support at all times’.

Expanding its overseas portfolio, Sarovar Hotels Pvt. Ltd. announces the signing of its latest project in Africa, Sarovar Premiere Lusaka in Zambia. This development marks Sarovar’s presence in the five countries in Africa including Tanzania, Kenya, South Sudan, Ethiopia and Zambia. Sarovar Premiere Lusaka is an 82 key all-suite hotel conveniently located around the city centre. Built in elegant designs with all modern facilities, it is the only all-suite hotel in town which will offer the space and comfort of a personal apartment, an extension of a home. The hotel is being developed by Neelkanth Group based out of Zambia whose core business lies in steel, lime, copper cables and real estate. Sarovar Premiere Lusaka is expected to open in 2018. Sarovar Premiere Lusaka represents Sarovar’s exponential growth in Africa. Making its presence in Lusaka, the largest city of Zambia and one of the fastest developing cities in South Africa, the group hopes to spread the signature Sarovar hospitality across the continent here. Upon completion, Sarovar Premiere Lusaka will offer 82 guest suites, an all-day dining, a bar lounge and an alfresco diner. The hotel will also make for an ideal destination with its excellent banquet and conference facilities. Those looking for some leisure indulgences can unwind at the spa, swimming pool or the wellness centre equipped with the best of services and amenities.

Travelport announced that it has become the first GDS to be granted with both ‘Aggregator Level One’ certification and ‘IT Provider Level Two’ status by the International Air Transport Association (IATA) as part of its New Distribution Capability (NDC) programme. For airlines, this means that Travelport is able to fully integrate with its NDC application programme interface should the airline choose to use NDC-XML messaging to distribute and deliver their fares and products. For travel agencies and travel management companies, this means that when shopping for and booking flights via Travelport’s Travel Commerce Platform, they will have even more enhanced travel content and greater access to ancillary offers. In particular, Travelport-connected agents will be able to make ancillary sales post the original flight booking, and through their preferred agency workflows, for the first time. Travelport has also achieved the NDC-capable ‘IT Provider’ Level Two status, making it only the second organisation—and first GDS–ever to be designated as NDC certified and NDC Capable.  This further expands its NDC capabilities and means that Travelport also has the option to distribute IATA NDC offers for fares and prices on behalf of the airlines electing to use IATA’s industry standards.