Air India, Jet offer extra bonuses to agents

Air India and Jet Airways have started offering an additional four per cent incentive since last week to agents for selling business class seats on domestic routes.

The move to increase sales comes ahead of Tata- Singapore Airlines’ entry in the domestic market. 

The additional incentives are being offered for sale till September-end. Air India and Jet Airways also offer one per cent regular commission.

Agents also earn productivity-linked commission for meeting sales targets.

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Air India earns between Rs 45 crore (Rs 450 million)-Rs 50 crore (Rs 500 million) in revenue daily and of this, Rs 5 crore (Rs 50 million)-Rs 8 crore (Rs 80 million) comes from business class sales across its domestic and international network.

The airline expects a big boost in its business class loads as it joins the 26-member Star Alliance which offers business travellers reciprocal frequent flyer benefits, lounge access and other benefits.

Jet is also standardising cabin configuration on its Boeing 737 fleet, with 12 business class and 156 economy class seats, to improve yields by tapping into both segments.

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Currently, the 737 planes are flown in three configurations; 29 of these aircraft will be reconfigured.

Agents say business class demand is slow and companies have cut down on travel expenses and such incentive schemes are one way to encourage agents to push sales.

These schemes are routinely used to boost sales on international flights but are not very common in domestic sales.

Jet Airways is also selling coupons worth Rs 110,000 to agents, which are used to issue up to four business class tickets.

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“The coupons are popular among business travellers as using them helps them save costs by about 10 per cent,” said Pradip Lulla, national general secretary of Travel Agents Federation of India.

Both, Air India and Jet Airways are also facing competition from low cost airlines IndiGo and SpiceJet in the economy class segment.

The launch of Tata-Singapore Airlines will increase competition in the premium business as well.

Tata-Singapore Airlines is targeting a September launch, with 87 weekly flights in the first year of operations, the airline has said in its application to the Directorate General of Civil Aviation or DGCA for an air operator’s permit.

These flights will link Delhi with Mumbai, Bengaluru, Hyderabad, Ahmedabad, Goa, Jammu, Srinagar, Patna and Chandigarh.

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To fly higher

• Rs 45-50 crore (Rs 450-500 million) Air India's daily earnings
• Rs 5-8 crore (Rs 50-80 million) Business class sales per day across Air India's domestic and international networks
• Rs 110,000-Jet Airways' coupon value sold to agents, used to issue up to four business class tickets
• 737 Number of Jet Airways planes flown in three configurations
• 29 Number of Jet aircraft that will be reconfigured