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Commission Cap: An arbitrary cap set by airlines on the amount of commission paid to travel agents for the sale of air tickets, irrespective of the fare value. It is devised to enable airlines to enhance their profitability by reducing their reliance on travel agents as their primary distribution channel. This practice also enables airlines to have better control of their distribution costs, promoting a more direct relationship with their customers through digital channels. Ultimately, this profit-saving measure often results in travel agents receiving lower overall commission payments and having to compete in a more challenging marketplace.
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