Jet Airways is pushing web sales to increase its revenue and cut distribution costs. The airline is selling 100,000 seats at a discount to drive this strategy.
Another reason could be to control distribution costs. An airline has to pay travel agents and online portals commission for each transaction cost, which it can avoid if the booking is done from its own website. Travel agents are paid three per cent commission on the basic fare and fuel surcharge.
In 2010, the airline spent Rs 1,261 crore (Rs 12.61 billion), which was 28 per cent higher than previous year on sales and distribution and costs.
In its latest annual report, the airline attributed the increase in these costs to the rise in commission cost, an impact of the rise in revenues and increase in advertising cost due to launch of new international routes.
On a standalone basis, the airline earned a profit of Rs 9 crore (Rs 90 million) in 2010.
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