Korea agents oppose commission cuts
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According to the Korea Times, travel agencies are claiming the commission cuts would drive many out of business.
Korean Air and Asiana Airlines used to give 9% commissions. Now, Korean Air plans to cut the rate to 7% starting April, and Asiana would do likewise from May.
Chung Woo-sik, chairman of the Korea Association of Travel Agents, was quoted saying: “The carriers, which make hundreds of billions of won in revenue, decided to cut the commission unilaterally. It’s like an abuse of their power against poor agencies.”
He claimed about 20,000 workers in the tourism industry are expected to lose their jobs.
Officials of the two carriers were quoted saying that the role of agents was diminishing with e-tickets and growing online sales.
Commissions usually makes up some 60% of small- and medium-sized travel agencies’ revenues, the report said, adding that commissions have remained unchanged for the last 40 years.
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