Financial Times - Travel industry to fight US dollar fares issues

The new president of the Travel Agents Association of Sri Lanka (TAASL) has slammed SriLankan Airlines for offering special packages to the travelling public – at the recent Travel Mart – depriving travel agents of a large quantum of business.

Nihal Perera, elected president for the third time in the association's history, made these comments at the recent TAASL AGM where he said airlines were now resorting to advertising in a way by using special packages in the media and offering passengers the chance to go directly to the air lines and not through travel agents.

“To the best of my knowledge almost 90% of the sales are generated by the travel agents and I do not consider it justifiable for airlines to overlook the role played by the travel agents and woo the public to contact them direct. I must commend some airlines who suggest coming through their preferred travel agents but sad to say that most airlines are now offering various special airfares and packages to come direct to the air lines,” he said.

He thanked Tourism Secretary Dr. P. Ramanujam and Additional Secretary George Michael for helping the outbound industry obtain an exemption of the TDL on airline ticket commissions.

Perera said the future calls for facing certain measures are not very conducive to the outbound travel agents as the measures that have been taken by the airlines have to a great extent curtailed whatever revenue the agents derived as a outbound travel agents.

Under BSP it is a matter of concern that agents are “capped” when reaching certain limits in the guarantee given which has caused a major problem to make advance payments to issue ticket.

“Voiding fees are not justifiable and bills should be reasonable imposing such fees. The taxes on tickets is around 40% of the airfare for which agents does not receive any benefits. Net fares have been introduced by airlines depriving the agents of commissions which have resulted in agents having to charge a service fee from clients. The charge of such service fees is hardly sufficient for agents to meet their overheads to continue in business,” he added.

Perera said the introduction of the BSP to Sri Lanka has had a major setback to the small, medium travel agents, as minimum guarantee levels have to be given to BSP and agents have to be IATA approved to have been linked with airlines, to transact business with air lines.

He said the role played by the regional air lines by offering special low fares has certainly helped the travelling public and an element of competition has been brought about by low cost carriers.

“If the regional carriers can obtain yields with low fares, I do not see the necessity for the other air lines to work on higher fares”.

Perera also referred to the move to quote airfares in U.S. Dollars effective 1st October. All associations -- TAASL, IATA and SLAR have made submissions to the relevant authorities not to permit such a move. “We will work as a joint united front to prevent such a move. If the airlines are looking at yields increase the airfares, and not resort to U.S Dollar fares,” he added.