Athens “service charge” set at CYP 10-12
Cyprus Airways (CAIR) has told travel agents that it will scrap their commission on tickets from June 1 and replace it with a service charge, which may bring even more transparency to the outgoing tourism market valued at CYP 400 mln.
The national carrier’s decision, which follows international trends, is seen forcing other airlines to follow and scrap travel agent commissions as well. CAIR currently pays a 7% standard commission on ticket sales to travel agents, which is a cost to the airline, whereas after the introduction of the service charge, the cost will be incurred by the public.
All travel agents are seen implementing the decision with effect from June 1, while CAIR and other airlines shifting to the new system are also expected to levy the service charge at their respective points of sale.
The Chairman of the Association of Cyprus Travel Agents (ACTA), Akis Kelepeshis, who is also the Chairman of Top Kinisis Travel Public Co. Ltd., told the Financial Mirror that the introduction of the service charge will bring added transparency to the market.
According to industry estimates, the service charge on a return ticket to Athens and other Greek destinations as well as the Middle East will range between CYP 10-12. The service charge on tickets to Europe is seen at CYP 18-20, while for long haul flights, the service charge is seen at CYP 35 per ticket.
Travel agents are seen boosting their revenue on short haul flight tickets, but may lose out on the long haul flights. This is because agents used to earn CYP 5-7 based on the 7% commission on an Athens ticket, which now is seen rising to CYP 10-12, but on long haul flights, their income is seen at the same commission level or slightly below.
Kelepeshis said the introduction of the service charge will also allow the public to realise the full cost of the ticket they are buying rather than be misled by advertisements promising fares to Athens starting from CYP 19.
Kelepeshis adds that the public will also realise that airport taxes, fuel, insurance and the service charge will add up more than the actual ticket cost from June 1.
He estimates taxes, fuel and insurance costs on a Larnaca-Athens flight at CYP 47.50, which when added to the service charge of CYP 10-12, match or exceed the ticket price.
Kelepeshis does not believe that the increase in costs will affect the prospects of outgoing tourism, which last year saw 915,000 travellers going abroad. Included in this number are the 600,000 packages that were sold last year, up 6% over 2004, which according to Kelepeshis are seen moderately up in 2006 because of the parliamentary and Archbishopric elections as well as the World Cup and the fact that several holidays this year fall on Saturdays.
“During election times, people stay home and this is seen moderating the increase in the number of packages sold,” said Kelepeshis.
