Agents get their fees back as airlines give in

Agents get their fees back as airlines give in

Mumbai / Delhi: It was an air war that travel agents have won over airline firms, for now.

Airlines firms indicated last year they would not pay travel agents a commission on tickets sold and asked them to charge a transaction fee from the customers instead, pointing at a similar global practice.

Also See Agent Commission: A Brief History (Graphic)

The agents were up in arms and all three trade associations banded together to oppose the zero-commission regime.

Some international carriers stopped paying commissions and India’s biggest private sector carriers Jet Airways (India) Ltd and Kingfisher Airlines Ltd followed suit.

There are at least 40,000 travel agents in India, mostly small operators, that employ some 500,000 people across the country. They said Indian customers were not yet ready to pay a transaction charge to travel agents and that most of them will have to, therefore, close shop.

Trade associations filed lawsuits against the new practice in different courts in India.

Meanwhile, the global financial crisis and economic slowdown reached Indian shores and airlines started losing passengers.

The agents’ associations started political lobbying, enlisting the support of the Left parties. They also started Gandhigiri—a form of non-cooperation, roughly translated as Gandhi’s way—against the carriers.

They decided against selling Jet Airways’ tickets, which saw a decline in its occupancy. To add to the airlines’ woes, the Calcutta high court ordered a status quo on reducing the commission on tickets to zero.

The airlines relented. Jet Airways announced a restructured 3% commission that actually worked out higher than the earlier 5% on base fares. Kingfisher Airlines followed.

A decision by Air India is expected soon.