Mumbai: Marking a crucial victory in the battle by travel agents to regain their commissions on air tickets, Dubai-based Emirates Airline has decided to continue paying 5% commission even as National Aviation Co. of India, or Nacil (that runs Air India), and Singapore Airlines are set to discuss the issue as well.
As a part of domestic and international carriers abolishing existing 5% commission to travel agents, Emirates had written to agents that it will implement 0% commission in line with others.
“This is a landmark victory for Indian travel agents as an international carrier has informed us that it will continue to pay 5% commission on the gross fare,” said Iata Agents Association of India, or IAAI, president Biji Eapen.
Mint reviewed a letter written by Orhan Abbas, vice-president (India and Nepal) of Emirates Airline, to travel agents informing of the decision to continue paying a 5% commission even after 1 April.
Last week, Jet Airways (India) Ltd and Kingfisher Airlines Ltd decided to give a 3% commission on gross fare.
Final word: Emirates will continue paying 5% commission to agents. Jeremy Bales / Bloomberg
“Chennai-based Paramount Airways has also informed us to give 3% commission on gross fare, that is including base fare and fuel surcharges,” said Eapen, who also runs a travel agency, Speedwings Travel and Cargo Pvt. Ltd, in Kochi.
Mint also reviewed a letter written by Reji. J. Mathew, sales manager (Kerala) of Paramount Airways to travel agents introducing 3% commission effective 11 December.
“In effect, the recently announced 3% commission will work out at 6.5% commission compared with the old 5% commission, which was excluding fuel surcharges. Therefore, this move validates the role of travel agents,” Eapen said.
Starting 1 November, domestic carriers had stopped paying commission to travel agents and were persuading them to impose a transaction fee for every ticket sold in line with international practice. While a section of travel agents demanded airlines include the transaction fee in the ticket prices, others wanted the original 5% commission.
Airlines and travel agents could not reach a consensus as the carriers were not willing to include transaction fee as part of ticket price. The airlines wanted to abolish the commission to cut losses.
On Tuesday, the government said several private airlines and Air India have resumed commission to travel agents after they had decided not to pay from 1 November. In reply to supplementaries, civil aviation minister Praful Patel said in Rajya Sabha: “Jet and Kingfisher have started paying commission on basic fare and fuel surcharge. Air India also abolished transaction fee from 2 December.”
Travel agents said Deutsche Lufthansa AG, Singapore Airlines and Japan Airlines Corp. had abolished commission while British Airways Plc., Gulf Air, Oman Air and Saudi Arabian Airlines continue to pay 5% commission.
PTI contributed to this story.