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Closing
the lid on an old practice “Many agents may close down; it would affect employment,” warned veteran industry specialist Nihal Perera. He said the industry has reached “boiling” point with the move. Earlier this month SriLankan Airlines begun advertising and selling tickets on net fares saying this excludes agency commissions and other costs. The net price of the ticket is listed on the ticket unlike before where the agency commission is also included. SriLankan has been paying agents a commission of 7 percent, down from 9 percent about three years back. But some industry experts say the commission-based ticket sales is gradually going out globally and travel agents should be prepared to move with the times. “Agents should start offering a value added service and charge for those services like handling of visas and travel arrangements,” one said, adding that there were mixed views in the industry over the lifting of the commission payment practice. Suraj Dandeniya, President of the Association of Licensed Foreign Employment Agents, said migrant workers represented the bulk of the outward traffic and didn’t see much of a problem from the SriLankan move. He said that often recruitment agencies were not given a fair deal by some of the agents, adding that in the case of travel agents that are subsidiaries of recruitment agents, no commission was paid by SriLankan. “These travel agents offered a complete service to the client. This is the way forward.” Top SriLankan Airlines officials were not available for comment on the net fare issue. SriLankan’s Singapore fares are being offered at Rs 9,900 return but with the add-ons – fuel surcharge, local and foreign airport taxes – the total fare is at least Rs 23,000. To many travellers, the attractive fares advertised by many airlines to popular destinations like Singapore, Bangkok or Kuala Lumpur are only the net price, meaning the actual cost would be at least Rs 12,000 more than what one sees in print. The add-on costs are contained in small print under “other costs apply” category or “conditions apply”. Suresh Mendis, President of IATA, Sri Lanka Chapter, believes a major crisis is brewing but that there are hopes of a resolution. “We have had discussions with SriLankan and we are looking at inserting a fee based entry in the ticket which the agent will retain as his commission or fee,” he said. He said the sudden withdrawal of a decades old practice of commissions on tickets was unfair since the industry was not prepared. “I don’t think anyone will object if there was a phasing out of this scheme.” Noel
Fernando, President of the Travel Agents Association of Sri Lanka
(TAASL), said the decision was hastily decided upon because SriLankan
Airlines has opened many regional offices and is advertising fares
on the Internet. “That’s fine but can they provide a
total service like handling visa, travel arrangements, etc for which
travel agents don’t charge anything extra?” “They (SriLankan) don’t have staff to handle services other than only ticketing,” he added. Fernando said the Sri Lankan culture is such that no one will pay anything more than what is the listed price. “Take our supermarkets for example. Can they charge anything more than the listed price of the product for which a commission is paid to the vendor?” he asked. Fernando believes the move to setting net fares came from the BSP (Billing, Settlement, Payment) system that the International Air Travel Association (IATA) wants implemented by mid-2006. Under this IATA wants all agents to make payments within 15 days unlike now where a lot of credit is provided. “This is a good thing but again should not be imposed suddenly on the trade,” Fernando said. Once the BSP is in place, all tickets will be routed through a IATA-led process which means than all travel agents must be members of IATA too. At the moment there are close to 50 agents who are IATA accredited out of some 200-odd agents. |
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