DAMMAM, 16 October — A sharp decline in passengers, an increase in the cost of insurance, the never ending undercutting, and now the lowering of commission to travel agents: it all spells doom for airlines operating from the Kingdom.
Almost all airlines operating to and from King Fahd International Airlines have reported a steep fall in passengers and many cancellations of bookings made prior to Sept. 11.
The heads of Arab airlines at a meeting in Cairo last Friday urged their governments to ease visa restrictions to boost travel within the region.
"We call on the Arab states to facilitate granting entry visas to Arab citizens to enable airlines to organize flights to help face the difficult current conditions," Saudi Arabian Airlines Chairman Dr. Khaled ibn Bakr was quoted as saying after the meeting.
The meeting of the executive committee of the Arab Air Transport Union (AATU) also recommended commercial cooperation between Arab airlines and appointed a committee to study the matter, Ibn Bakr said in Cairo.
EgyptAir chief Muhammad Fahim Rayyan said the committee was "confident" that Arab governments would come to the aid of their national airlines to prevent them from going under after the Sept. 11 plane attacks on New York and Washington shook the world aviation industry.
Ibn Bakr said the committee had also agreed during the three-hour meeting on a number of security measures to boost passenger safety, although he did not specify what those measures were.
The global aviation industry has been shaken since the Sept. 11 attacks, which caused insurance premiums to shoot up for airlines.
Moreover, the recent decision by the Board of Airlines Representatives of Saudi Arabia (BARSA) to reduce the commissions for travel agents, from nine percent to seven percent, was another blow to the industry.
Airlines are apprehensive that the reduction will reduce air traffic still more, as the lower commissions will inevitably result in an increase in fares.
From Nov. 1 all the airlines will part with only seven percent in commission to the travel agents instead of the earlier nine percent.
The passengers will be the ultimate losers because of the decision, said a travel agent in Thuqba.
The mushrooming of travel agencies, which resulted in cut-throat competition, has forced them to pass on a major portion of their sales commission to the passengers.
"We are virtually forced into a situation where we normally part with almost all our sales commission, especially on the Sub-Continent routes," said a disgruntled travel agent in Alkhobar.
"We are keeping just one or two percent for us," said another agent in Dammam.
Airlines say that it was the time for all carriers to stand firm against fare undercutting in order to bring some sanity to the market. They say that the initiative has to come from Saudia with the firm support of the Presidency of Civil Aviation.
Meanwhile, Saudi Arabian Airlines has extended the last date for accepting applications from domestic tour operators and Haj organizations for chartering interior Haj flights to Oct. 30, said Abdullah Al-Johni, assistant director general of promotion and marketing at the airlines.
The move will enable the Haj establishments to get the actual number of pilgrims they will have to transport, he added.
