The airlines-agency relations are of unsavory dependency. Though airlines are the product owners, they do not have much control over the occupancy levels of their seats which is more controlled by the agencies. A majority of the seats booked are through the agencies and this makes the airlines dependent on the agencies. However, by allowing online booking directly on their website and with an ever increasing number of online booking has encouraged the airlines to cut the leverage of the agencies and provide the cheapest air tickets to the customers directly on their websites.
Airlines are also increasing vying for a new and better global distribution system which takes into consideration the present realities and which is likely to dilute the influence of the agencies over the system. Many airlines have withdrawn their inventories from the GDS for the purpose of pushing the customers directly to their websites for finding the cheapest air tickets rates. Further, the agency commissions on the sale of flight tickets are also being reduced progressively and seem to be moving towards a zero commission regime.
In the wake of all these developments, which seem to be against the agencies, there is an emergent need for the agencies to make quick moves in order to survive and grow. Some of the most important steps which can be taken in this regard are:
- Increasing the basket of travel products by including holidays, hotels and other products and services.
- Increasing their off-line presence using the B2B and B2C strategy so that their reach can be extended closer to the targeted population segments.
- Working in the niche segments of travel where airlines lack the customization such as student travel, MICE, etc.