Mumbai/New Delhi: Air passengers will have to fork out more money for travel as the domestic carriers refused to retain the 5% agency commission from 1 November. Instead, agents are now planning to impose a “transaction fee” on every ticket sold.
The nature of this transaction fee and quantum will be decided in a joint meeting by travel agents and airline representatives next week.
India’s airlines have already increased fares six times this year by imposing fuel surcharge and adding to basic fares. A passenger flying a long-distance flight pays Rs2,900 as fuel surcharge, Rs150 as congestion surcharge and Rs225 passenger service fee, apart from the basic fare.
In protest: Iata travel agencies such as Speed Air in Old Rajinder Nagar, New Delhi, was closed as part of an all India strike against the airlines’ implementation of 0% commission. Photograph: Madhu Kapparath / Mint
“In principle, airlines have agreed that they will find a possible solution to include the proposed transaction fee on the ticket,” said Travel Agents’ Federation of India, or Tafi, national general secretary Ajay Prakash. “I cannot tell you what the increase for a domestic or an international ticket will be. We are trying to bundle this increase as a part of the ticket price.” Prakash added that travel agents will sit with legal and technical executives of airlines to find out the best way to implement this.
Even as the travel agents and airline companies are working out alternatives for 0% commission from 1 November, the travel agents’ associations are divided on settling the issue. At a meeting on 14 August with representatives of airlines—including National Aviation Co. of India Ltd, or Nacil, (which runs Air India), Jet Airways India Ltd and Kingfisher Airlines Ltd—two leading travel agents’ associations agreed to impose a transaction fee on every ticket sold, instead of the current 5% commission.
Tafi and Travel Agents’ Association of India, or TAAI, have agreed to form a committee along with representatives of airlines to finalize the modalities of charging a transaction fee on every ticket sold. The two associations claim to represent about 80% of the 2,600-odd accredited members of the International Air Transport Association, or Iata.
However, the third association, Iata Agents’ Association of India, or IAAI, clarified that it will not back down from the original demand of retaining the agency commission. It also argued that Air India has agreed that it will retain 9% commission till May 2009.
Biji Eapen, president of IAAI, said: “One can understand if airlines are eliminating agents’ commission to slash fares in public interest. On the contrary, they are increasing the fares. We already have a reinstatement of 9% agency commission instead of 5%. The so-called replacement of ‘transaction fee’ will not work in the Indian context as we are not used to giving ‘tips’ for every service, like in the US.” Eapen said that Tafi and TAAI, which have been fighting against 0% commission, have compromised and are smoking the peace pipe with airlines. “You would see many of TAAI and Tafi members joining us against this compromise. It is not only the travel agents who will lose out, but also the government stands to lose substantial amount of money in terms of service and other taxes as tickets worth Rs26,000 crore is issued through agents a year,” Eapen added.
IAAI said it has a membership base of 617.
“We are still in the meeting,” said P.K. Gupta, executive director, sales and marketing - passenger with Nacil. However, another senior Nacil executive said that the airlines have agreed to sympathetically look at issues of travel agents and have “in principle” agreed to help agents to execute a new system of transaction fee on every ticket.
Nacil’s Gupta, Kingfisher Airlines’ vice-president (global sales) Siva Ramachandran and Sudheer Raghavan, chief commercial officer and Sonu Kripalani, vice-president for passenger sales (India) of Jet Airways attended the meeting.
“We have requested airlines to defer the decision to eliminate 0% commission until the point we (develop) a proper method of collecting service or transaction fee,” Tafi’s Prakash said. “But, we are looking at a long-term solution rather than a short-term relief.”