Airlines stick to November 1 deadline for agent fee cut

Indian carriers have snubbed travel agents' requests to defer the date of non-payment of commission on air tickets from November 1 this year to April 1 next year.

In a meeting held today between the executives of Air India, Kingfisher and Jet Airways and three travel agent federations— Travel Agents Association of India (TAAI), Travel Association Federation India (TAFI) and IATA Agents Association of India (IAAI), representing 2,200 of the total 2,900 agents in India, the airline executives said they would stop paying commission from November 1 this year and would not defer the date to April 1 next year.

“The airline executives told us that deferring the commission dates is completely out of the question even after we explained to them that this would make our tickets costlier for the customers,” said Ajay Prakash, General Secretary, TAFI.

Indian carriers headed by Air India had first intimated the agents in June about stopping the commission payment of 5 per cent per ticket from October 1. International carriers such as Lufthansa and Singapore Airlines also decided to discontinue any commissions. After repeated requests from the agents, the carriers had agreed to defer the date to November 1.

“It is an established norm worldwide that commission is not paid to the travel agents. We are just implementing that norm in our country at a time when all airline companies are severely bleeding,” said a full-service carrier executive.

Travel agents however said the non-payment of commission would impact 70 per cent of the revenues accruing to more than 2000 travel agents in India.

“Also, we will have to pass on the 5 per cent commission to the customers and levy a service tax on that too, which will make the tickets around 7 per cent costlier,” said a Delhi-based travel agent.

Since the transaction fee of 7 per cent would make tickets sold by travel agents expensive and drive customers away, the agents also requested airlines to include a transaction fee in their ticket charges.

“Airlines have indicated their willingness to include the transaction fee on the tickets, while insisting that technical and legal issues need to be sorted out. Hence, a committee of experts has been set up to review the matter and make recommendations. This Committee will meet on August 21, 2008,” said C V Prasad, President TAAI.