Cheap plane tickets offered online by the Turkish Airlines, or THY, are causing hardships to approximately 2,000 travel agencies that receive income from airline ticket sales.

THY, seeking to increase online ticket sales, is pursuing a strategy that destroys its own distribution network, claimed owners of the agencies, which also offer consumers hotel reservations and bus ticket sales, the Turkish weekly magazine, Ekonomist, reported.

The agencies, facing the risk of closure while employing 25,000 people, were seeking a solution from the government, Ekonomist said.

The volume of tickets sold through agencies has already declined significantly as banks used large agencies, such as Vista, YKM Turizm, Setur and Viking, in their “free plane ticket” campaigns in recent years. However, THY's price promotion for online tickets now was seen as the second blow dealt, agencies said.

Further, agencies that have not established Internet capabilities are facing problems, particularly as airlines offer online discount ticket sales. Typically, ticket sales for THY constitute 80 percent of an agencies' revenues, according to industry sources.

THY, a member of the Star Alliance, is the company that least utilizes the Internet among all Alliance airlines, which is the basic reason for its launching online sales of discount tickets. Particularly harmed by THY's online sales are the small-scale firms operating in Anatolia.

Among all international flight tickets in Turkey, International Air Transport Association, or IATA, travel agencies sell some $1.2 billion in tickets annually. IATA agencies account for 85 percent of all internal flight ticket sales. Sales of THY tickets is 61 percent in this market. Among domestic flights, IATA now sells some $550 million, which amounts to 80 percent of all sales.

Cheaper online sale:

Beginning Aug. 1, THY online ticket sales offered savings of YTL 5 to 10 less for domestic flights, YTL 30 less for Europe, and YTL 50 to 80 less for the United States and Far East for international flights. The airline also announced it would sell tickets at even lower prices beginning Jan 1, 2009.

Other domestic companies, such as Pegasus, Onur Air and Atlasjet, also offer online ticket sales, but they do not provide the dramatic price reductions offered by THY.

Tourism agencies are reacting negatively to the new system, blaming THY for eroding its own distribution network. “I am unable to understand why such a big company wants to weaken its distribution network,” said Seda Evliyagil, managing director of Focus Turizm.

Meanwhile, the Association of Turkish Travel Agencies, or TüRSAB, is negotiating with THY to temporarily stop selling discounted fares online.

TüRSAB officials said they were not opposed to THY's offering online ticket sales. Their timing, however, for offering price reductions was causing problems, said Muammer Güner, chairman of the IATA Committee at the TüRSAB. Travel agencies in Turkey needed more time to develop the Internet infrastructure for online ticket sales, he said.

The situation interested officials in Istanbul, Güner said, adding, “These online sales should begin once 60 percent of approximately 200 agencies operating in Istanbul are able to sell online. In the following phase, service cost reduction rates should not exceed 30 percent.”

There are approximately 435 IATA suppliers selling domestic and international flight tickets, as well as 75 dealers who sell only domestic flight tickets. Meanwhile, at least 1,500 sub-dealers selling tickets purchased from these travel agencies.