Four major and midsize travel agencies said Friday they will set up a joint venture this summer to buy international air tickets in greater bulk in a bid to bolster their cost competitiveness.
The four — Nippon Travel Agency Co., Toptour Corp., NOE Corp. and F-ness Corp. — believe purchasing in bulk will bring them better sales incentives and lead airlines to effectively cut wholesale ticket prices.
The amount of venture capital and the investment ratios have not yet been decided, they said, adding more travel agencies might join.
The value of the international air tickets the four bought from airlines in fiscal 2008, for example, came to a combined totaled of about ¥120 billion in terms of publicly announced prices.
The planned venture will also purchase tickets from airlines on behalf of other agencies on a consignment basis, they said.
Profitability at travel agencies has been under pressure as more consumers begin buying tickets online, bypassing travel agencies. The number of travelers has also been declining amid the slack economy.