PLB back on SpiceJet runway
Within days after withdrawing it, SpiceJet restores Productivity Linked Bonus (PLB) with due recognition to their travel trade partners.
The airline recently informed travel agents that it was restoring productivity-linked bonus (PLB) with effect from May 1, days after withdrawing it.
“The decision to withdraw the PLB was taken hoping that ( the) civil aviation ministry will come up with a solution for travel agents’ remuneration as guided by the Supreme Court. As there has been no solution till now, SpiceJet has decided to rein- state the withdrawn PLB effective May 1,” the airline said. “This means the earlier incentive components will continue. After the ministry’s pending decision on transaction fees, SpiceJet would come up with a comprehensive incentive which will be mutually beneficial,” it added. Speaking to , Priti Dey, Executive, Corporate Communication at SpiceJet, said, “The travel trade community is like our colleagues. Post the Ministry of Civil Aviation’s pending decision on transaction fee, we will take decision that will be beneficial for both the parties.”
Unlike full- service airlines, low- cost carriers (LCCs) don’t pay regular commission on all ticket sales and do not give 15-day credit to agents to remit the sales amount. LCCs collect advance deposits from agents releasing inventory worth that amount. They are paid one per cent deposit incentive and productivity commission of 13% if the sales target is met. SpiceJet had withdrawn the commission. This led to protests from travel agents who feared that other airlines too will follow suit.
Ajay Prakash, Chief Executive, Nomad Travels, said, “The travel agents of India have individually and collectively asserted their right to livelihood and restoration of the PLB is the
The travel trade community is like our colleague
E
ANITA JAIN arlier, in a letter circulated to the travel fraternity, SpiceJet had said, ‘ To maintain uniformity across all market segments and considering the escalating costs, we have taken a conscious call to withdraw the Productivity-linked Bonus Component effective May 1st, 2013. We request you to please appreciate this decision of ours in the right spirit and hope that we will continue to receive your support and patronage.’
This decision came between issues like zero commission and increasing insurance rate on BSP (Billing Settlement Plan) and introduction of weekly payment 75% of the airline business is through travel agents. So I hope our message is clear and airlines comply with the national law that enable agents to be remunerated at 5% commission.”
CCO, IndiGo Airlines
Director, Star Air Travel Services, says, “I believe in the basic principle survival of the fittest. If the airlines can manage the show without the
Blue
Travel agents are our core sales channels
cycle from June 1, 2013.
Explaining the PLB dilemma, Chairman – Western Region, TAAI had said, “PLB is something which is paid to few select travel operators.
Jay
Madhav Oza,
Bhatia,
CEO, GoAir
We don’t intend to suspend PLBs
Airlines are putting all their eggs (ticket sales) in few baskets (consolidators) by paying them hefty PLBs for meeting their ticket sales target. However, the airlines don’t know what happened agents, they will definitely do that. But considering the size and diversity of Indian market, no airline can reach the deep pockets and explore business singlehandedly. In the past one with Spring Travels in New Delhi, where the agency defaulted on the payment of
120 crore for ticket sales. With healthy PLBs (over 10 per cent of the total fares), consolidators pass on a percentage to customers, thus undercutting mid and small sized travel agents.”
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Chief Commercial Office, IndiGo Airlines had said, “Currently, we are not looking at any changes in our PLB levels. Travel agents are our core sales channels and we intend to continue having a strong partnership with our travel partners.” On similar note, CEO, GoAir said, “As per my knowledge, we don’t intend to suspend PLBs.”
Sanjay Kumar,
Giorgio De Roni, month, since the withdrawal of PLB by SpiceJet, the sales of the LCC were badly affected and since they now believe in the principle of ‘ give and take’, they reinstated the PLB.”