Mumbai: Two prominent travel agents’ associations in the country have decided to join hands to take on international and domestic airlines for paying agents what they say unfair commission on ticket sales.
The Travel Agents’ Federation of India (Tafi) and the Travel Agents’ Association of India (TAAI) have agreed to jointly approach the Directorate General of Civil Aviation (DGCA), the civil aviation regulator, asking for higher commissions on ticket sales.
Unfair deal: Passengers at the New Delhi airport. Travel agents’ associations Tafi and TAAI claim airlines sell 85% tickets through agents. (Photo: Madhu Kapparath/ Mint)
This follows a directive by the Karnataka high court in December 2007 on a writ petition filed by the travel bodies two-and-a-half years ago. Tafi approached the court after airlines decided to lower the commissions for travel agents from 9% to 7%, and later to 5%. The court held that DGCA was the final authority to resolve the issue and asked the agents to submit a petition to it.
Tafi and TAAI are likely to submit the petition to DGCA this week. Praveen Chugh, president of Tafi, and C.V. Prasad, president, TAAI, confirmed the development. The two associations claim to represent about 80% of the 2,600-odd accredited members of the International Air Travel Association, or IATA. Tafi and TAAI claim that the airlines sell 85% of ticket through agents. “By lowering the commission for travel agents, the airlines have violated certain sections of the Aircraft Act. We are going to take up the issue through DGCA ,” said Prasad.
Earlier this week, Tafi issued legal notices to most of the airlines flying into the country for separating surcharges on fuel, insurance and security from basic fares, on which they are entitled to the commission. Tafi said the airlines club these surcharges under taxes, though these are not levies paid to the government.
A similar case is set to conclude in an Australian court where travel agents have demanded that airlines, including Qantas and British Airways, should pay commissions on fuel surcharge.
“The airlines had lowered the commission from 9% to 5% on basic fare. Now, they have clubbed the surcharges under tax, which means nearly 40% of the total fare is not commissionable,” said Tafi national general secretary Ajay Prakash.
The airlines beg to differ. “Since 1998, travel agents worldwide are moving towards a zero percent commission regime. Indian travel agents should also focus on service fees from their customers rather than on commissions,” said Sudheer Raghavan, chief commercial officer at Jet Airways.