Travel agents to stop airline ticket sales from 16th

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KARACHI: Travel agents would stop selling tickets of top airliners if downward revision of profit margins on ticket sales is not reversed by July 16, a Travel Agents Association of Pakistan (TAAP) representative told Daily Times on Tuesday.

“We (travel agents) have offered airliners dialogue to settle down the issue because aggressive tactics would destabilise the aviation industry,” TAAP Central Chairman Mohammad Naeem Sharif said.

The airlines - Qatar Airways, Emirates, Gulf Airlines, Ettihad Airways and Pakistan International Airline (PIA) - have decided to reduce share of the travel agencies on national and international ticket sales from nine percent to five percent to be effective from July 16. These airlines make up 75 percent of Pakistan’s air traffic.

The airlines have changed their fare mechanism reducing basic fare, while increasing the fuel surcharges to make up for the increasing cost of operation, Sharif said. The catch is that the travel agencies get their profits on the basic fare, he added, hence the move is unfair to them.

Sharif said the cut would lead to losses in billions of rupees to the travelling industry, and may even lead to bankruptcy and unemployment, adding that the government would lose billions of rupees with a fall in tax returns.

Loss: The revenues of the travelling agencies would be cut by Rs 24.5 billion, while the government would lose Rs 2.5 billion. The TAAP executive committee met PIA officials on Tuesday to convey demands of the agents and negotiations with the airliners would continue until July 16, Sharif said.

TAAP regional general body held meetings on Tuesday in Karachi and Lahore. Similar meetings would be held in Islamabad and Peshawar on Wednesday (Today).

TAAP executive members would meet PIA chief and the Federal Board of Revenue (FBR) chairman today to discuss the issue. TAAP is a sole body of travel agents with affiliates numbering over nine hundred across the country.

Airblue first cut the profit margin to arrest its rising operational cost and without passing the increase to the passengers. Travel agents had boycotted the airline ticket and the issue was later resolved.

The airline companies all over the world have been cutting operational costs due to massive losses during 2008 in the wake of rising fuel costs. Twenty-four airlines have reported bankruptcy during the last six months.

International Air Transport Association’s Director General Giovanni Bisignani said that the airline industry problems have multiplied due to crude price shooting beyond $145 per barrel, incurring an overall loss of $2.30 billion.