DGCA asks 14 foreign airlines to explain tiff with agents

The Directorate General of Civil Aviation (DGCA) has asked foreign airlines to explain why they have not been giving commission or remuneration to travel agents. The DGCA has issued letters to 14 foreign airlines and given them a time period of 10 days to come up with the reasons.

The Travel Agents’ Association of India (TAAI), along with other travel fraternity bodies like TAFI, IAAI, IATO, ADTOI and ETAA, had a meeting with DGCA in Delhi yesterday, to seek a regulation which will safeguard the travel agents’ existence in the industry.

The DGCA raised questions over the way airlines structure the transaction fee and the logic behind asking agents to take commission from consumers.

“The travel agent is servicing the customer on behalf of the airline. Hence, it is only fair that the airline pay the commission to us. We will not charge the customer a transaction fee as we have been appointed to offer service to the customer on behalf of the airline,” TAAI’s President Rajinder Rai said.

Travel agents are quite positive about their meeting with the DGCA.

“Some airlines have been asked to respond to DGCA with their views on certain queries within ten days, after which the DGCA will take a final decision. We are very confident that the DGCA decision will work for the survival of this industry,” Rai added.

In December, the Karnataka High Court had held that the DGCA is the final authority to resolve the issue and asked the agents to submit a petition to it. TAAI and TAFI had filed a case in the Karnataka High Court against airlines when they had reduced the commission from 7 to 5 per cent in 2005.

Most airlines have stopped paying 5 per cent commission since November, forcing agents to shift to a fixed transaction fee on every ticket purchased. However, the fixed transaction fee, in the range of Rs 350 to Rs 2,500 a ticket depending on the class and routes, had also been discontinued from December. The move, in turn, prompted agents to boycott booking of tickets of foreign airlines, including the largest foreign carrier from India, Singapore Airlines.

Typically, travel agents and online portals account for more than 85 per cent of an airlines’ ticket sales, while the remaining 15 per cent tickets are sold directly by the carriers. There are around 50,000 travel agents in the country.