|
|
Kenya: KQ Issues Rates for New Ticketing Scheme
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
The East African (Nairobi)
24 March 2008
Posted to the web 24 March 2008
John Kariuki
Nairobi
Kenya Airways has released rates for a newly introduced service charge on tickets bought from its sales shops in Kenya.
The service charge takes effect on April 1, the same day the airline starts the zero commission scheme for travel agents on ticket sales.
In the service fee structure mailed to travel agents last week, the domestic tickets bought at the airline's sales shops will attract a service fee of Ksh1,000 ($14), regional tickets $30 for economy and $50 for club class while all other international travel tickets will be charged at $50 and $100 for economy and club class respectively.
It will be the first national carrier in the region to adopt the scheme but both Tanzania and Uganda Airways are reportedly considering following suit in line with the global trend in air travel.
British Airways was the first foreign-owned carrier to effect the measure in Kenya when it introduced it last May.
Last week, chairman of the Kenya Association of Travel Agents Peter Karanja told The EastAfrican that the fee structure issued by Kenya Airways is a guide to what the agents will charge.
"We have examined all the issues and consider this a good basic charge for services to customers" said Mr Karanja.
He downplayed fears among agents about a possible loss of business. Instead, he says the structure pays them more than the six per cent commission paid by the airlines on ticket sales. At the rate of four per cent, agents earned Ksh250 ($3.5) commission per Nairobi-Mombasa ticket but now stand to earn four times as much.
To proponents of the new scheme, this provides ample compensation to the travel agents.
Although a majority of airlines operating in Kenya will continue paying agent commissions, a number are expected to ditch the system for the new one by the end of this year. For example, Qatar Airways will be adopting the measure in June.
Mohammad Waris, a director at Senator Travel Services, explained that with every sale, the agent may be required to make a follow-up telephone call to inform the client or the airline of reservations or confirmation of bookings, a direct cost that was never charged and not covered in the commission rate.
"Add that to the computer time in processing the tickets, the delivery to customers and time spent in the transaction. It is clear that we have overlooked a vital component in our business," he said.
Still, the effect on travel agents may depend on how the Kenyan market responds to e-ticketing. A huge surge would chip away business from the travel agents.
However, there is growing optimism that while travellers may want to save on the service rates charged by the airlines and travel agents by transacting online, many will still prefer to use agents because of the additional benefits.
According to Mr Karanja, the new system will introduce the kind of professionalism that has been lacking in the travel sector. As a result, customers will be able to appreciate the real value of services they may have been taking for granted.
Until now, all we have charged for is the ticket sale, while giving away invaluable information on available airline options, airport transfers, and the like, all for free. We shall now charge consultation fee, just like doctors and other professionals do," said Mr Karanja.
He said agents will have to work harder and better in order to justify the mark up as service fee to survive in the business.
"The zero commission scheme will help upgrade the quality of service and value to both the travel agents and the customer," he said.
One concern among travel agents is that the combined effect of online transactions and option of buy direct from the airline sales desk could eat into their business, forcing the collapse of smaller companies.
According to the travel manager at Bunsons Travel, Eddy Mulinge, the scheme will transform the way the business is conducted.
"I see it motivating mergers to increase the size and capabilities of players in the sector in line with the new challenges," he said.
He said there were already signs of such mergers with large companies shopping for international partners to raise their profile and potential internationally.
Travel agents are also counting on the notion that travellers may not want to spend time on the computer especially with the slow dial-up system, while some want to avoid the inconvenience of airline counters or possible losses through wrong entries over the net.
|
"We also offer credit facilities to trusted clients, another advantage likely to work in our favour," said Mr Waris.
He also notes that agents handle an estimated 75 per cent of the ticketing business and will most likely retain a big share of it.
For KATA, the challenge is to avoid undercutting by its members and instead focus on providing better services and charging the logical fees for those services.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
