India Agents Win Power Play to Reinstate Airline Pay
Travel agents in India have demonstrated their power by booking away from airlines that had stopped paying agency commissions and forcing the government to order a reinstatement of airline commissions.
The Indian press is reporting that India’s civil aviation authority, the Directorate-General of Civil Aviation’s (DGCA), issued a directive recently asking international carriers to resume paying travel agent commissions.
At the same time, the DGCA has asked that agents stop levying service fees on air tickets they book, according to reports in the media in India.
The Travel Agents Federation of India (TAFI) issued a statement noting that the DGCA order “implies that, all airlines operating to/from and within India are required to pay a fair commission to their accredited travel agents, this is as per the current rules and laws of this country as also in accordance to various IATA Resolutions and Agreement.”
The TAFI statement declared: “The result we have today is the culmination of a hard fought battle over several years, which was done by travel agents against the airlines not only to protect their own interests but also to ensure that agents are not used as a medium by the airlines to indirectly pass on costs to the air travelers. This order will only bring more joy to the traveler by way of transparency and getting an air ticket at the published price.”
TAFI explained that the country’s travel agent trade groups, including TAFI and the Travel Agents Association of India (TAAI) as well as individual agencies, have waged court battles against the carriers’ zero pay policies that led to a court ordering the DGCA to investigate the issue in fairness to agents.
The TAFI statement continued: “But what is more significant is that without waiting for a proper guidance from DGCA, in late 2008 and early 2009 some leading foreign airlines unilaterally decided on “Zero” commission and instead advocated introduction of “Transaction Fees” by wrongly interpreting the IATA resolutions to their advantage by asking travel agents to begin collecting a fee from the travelers, based on level of service offered to the customer by the agent.”
India’s travel agency industry worked together with the single purpose of getting a fair commission from the airlines that the agents contend is the most appropriate form of remuneration for the work they do on behalf of airlines.
According to the Times of India, 13 foreign carriers do not pay commissions to travel agents in India, including British Airways, Qatar Airways, KLM Royal Dutch Airlines, North West Airlines, Air France, and Singapore Airlines.
“We are in the process of thoroughly studying the DGCA ruling and its potential consequences. Lufthansa will comply with all Indian laws and regulations, as always,” Lufthansa told one newspaper, which reported that travel agents are scheduled to meet some carriers next week to discuss the issue.
“We expect to meet Singapore Airlines, Air France, North West Airlines, British Airways, and Delta Air Lines next week and then the others will follow,” a travel agents association official told the Hindu newspaper.
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TAAI president Rajji Raitold said that agents “are very comfortable if the commission goes back to pre-November 2008 levels of 5%, although the rate has to be negotiated.”
The Indian media reported that travel agents had stopped the sale of airlines that had adopted the zero commission policy and recommended other carriers.
Singapore Airlines is reported to have felt the brunt of the agents’ boycott, with protests against the Asian carrier that included marchers bandying banners asking it to ‘Quit India’.
By threatening to boycott selling domestic air tickets, the Indian agents were also successful in forcing the major Indian airlines, Jet Airways, Kingfisher Airlines and Air India, to rollback the decision not to pay commission to agents.
The DGCA directive on commissions reads: “Firstly, since the zero commission system is loaded with a transaction fee, the consumer has to pay extra money. Secondly, an unscrupulous agent can charge an exorbitant amount as transaction fee from the customer. Thirdly, this system is giving rise to market dominance by some big agents, who are paid hefty amounts by the airlines in the name of productivity. This phenomenon, too, is not in the interest of the consumer as it reduces competition among agents.”
