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Indonesian Tour Agents Living on the Margins

Indonesian Tour and Travel Agents Demanding Higher Commission Levels from National Air Carriers

(11/30/2012) The Indonesian Association of Tour and Travel Agents (ASITA) is urging Indonesian air carriers to revise commissions paid to its members to become 7%-9%.

Asnawi Bahar, ASITA’s president said the idea level of commission should be 9% for travel agents and 7% for sub-agents, in order to create a sustainable business environment.

“At this time, sub-agents are earning 3% while travel agents earn 5% on the airline tickets they sell to the public,” said Bahar, quoted by Bisnis.com.

The ASITA president said the failure to revise airline ticket commission levels is stunting the growth of travel agents and also reducing the load factors of Indonesian carriers. Moreover, insists Bahar, the profitability of Indonesian airlines permits commission levels of 12%-13%, making the goal of 7%-9% relatively modest.

Bahar said on-line sales efforts by Indonesian airlines are displacing the tradition role of travel agents. This problem is made worse, he contends, by cash back offers to corporate customers and cooperative marketing agreements with credit card companies.

ASITA represents more than 7,000 member travel and tour agencies across Indonesia.

Bahar Asnawi said he would continue his quest for higher commission levels from the airlines with the carriers concerned and via various ministries of the Indonesian government.