SC ban on transaction fee fails to cut airfares

The Supreme Court’s order banning transaction fee in airline tickets hasn’t made air travel cheaper. Agents continue to collect a service fee from customers. They contend though the court order restricts airlines from charging transaction fees, there is no ban on agents charging a fee for their services.

Also, now that airlines have withdrawn the fee component in fares, agents are free to charge any amount for their services.

In an order last month, the Supreme Court had said transaction fees, in any form, couldn’t be collected from passengers until the civil aviation secretary took a decision on the issue. In December, the Directorate General of Civil Aviation had issued a circular restraining airlines from collecting transaction fees, as this didn’t adhere to the Aircraft Rules, 1937. The Federation of Indian Airlines had moved the Delhi High Court against the circular. The court had asked the entity to file an appeal with the civil aviation secretary.

For low-cost airlines, tickets included the transaction fee under a separate head. The fee was collected and retained by travel agents. Air India and Jet Airways tickets referred to transaction fees as “other charges”.

Air India had written to travel agents, asking them not to charge any transaction fee. It had, however, said agents might charge customers for services rendered by them. Agents started terming the fee “management fee” or “service fee”.

Before the Supreme Court order, a transaction fee of about Rs 200 was levied on domestic routes. Air India charged Rs 775-1,300 as transaction fee on international tickets and this was remitted to agents.

“We are collecting Rs 150-200 on domestic tickets. How much agents charge is up to each agent,” said an agent.

Iqbal Mulla, president of Travel Agents Association of India, said the court’s order didn’t ban agents from charging a fee. “Is it wrong for agents to charge fees for services? Agents would have to shut their business, as many airlines have already stopped paying commission,” he said.