Between 4500 to 5000 travel agents will go out of business if the national carrier decides to go ahead with their proposed zero commission plan effective from April 1, President of the IATA Agents Association of Sri Lanka Tilak Wickramasinghe warned last week.
SriLankan Airlines announced the decision to do away with the five percent commission currently given to travel agents from next month via a circular to outbound travel agents last week.
“There are currently over 4500 registered ticketing agents around the country. If SriLankan Airlines decides to go ahead with this decision, it is going to have a huge impact on the industry,” Wickramasinghe opined.
He said that IATA-AASL has already written to the relevant authorities and requested for an appointment to discuss and to make their representations to the Airline and the Civil Aviation authority prior to the implementation of the proposal.
President of the Travel Agents Association of Sri Lanka (TAASL) Wilhelm Brown was also of the opinion that this zero commission policy will hurt the industry. He was in complete agreement with Wickramasinghe in relation to the fact that around 4500 agents will be affected directly if the airline decides to go ahead with its decision.
“We are hoping to discuss the matter with the relevant stakeholders and arrive at a resolution that everybody can agree with,” he said. According to Brown, this meeting with the authorities will take place within the next week.
However, he said it was still too early to determine what kind of an effect this decision will have on the pricing and modalities of SriLankan airfares.
An IATA-AASL alumnus who wished not to be quoted said that Qatar Airways too has a similar zero commission policy but in the case of Qatar Airways the agents get attractive discounts and ‘special rates’ based on performance which is an incentive. She said that often a percentage of the discount the agent gets is passed on to the customer and that way the policy doesn’t necessarily affect competition among agents.
She said if the decision materializes, SriLankan Airlines too will have to adopt such schemes which they currently don’t have.
Speaking on grounds of anonymity, another ticketing agent was of the opinion that this will force agents to either upsell and survive or exit the market altogether. “If they (agents) decide to stay, they’ll be forced to quote lower than the net price of the tickets to keep the customers in tow. Despite the commission cut, they’ll have to keep offering competitive rates, which won’t be sustainable in the long run,” the agent added.
The Nation contacted Deepal Perera, Manager Media Development at SriLankan Airlines but he declined to comment on the matter.