Happy times may be back for travel agents with commissions coming back, but international airlines are yet to take a call on the Directorate-General of Civil Aviation's (DGCA) recent directive. The regulator had asked international carriers to resume their commissions to travel agents.
Thirteen foreign carriers do not pay commission to travel agents in India, including British Airways, Qatar Airways, KLM Royal Dutch Airlines, North West Airlines, Air France, and Singapore Airlines — mainly Western and European carriers, besides a few Asian airlines.
“We are in the process of thoroughly studying the DGCA ruling and its potential consequences. Lufthansa will comply with all Indian laws and regulations, as always,” said German carrier Lufthansa.
In fact, travel agents are slated to meet some carriers next week to discuss the issue. “We expect to meet Singapore Airlines, Air France, North West Airlines, British Airways, and Delta Air Lines next week and then the others will follow,” said a travel agents association official.
Zero commission
In the last one year, ‘zero commission' has been a bone of contention between carriers and travel agents. Travel agents had stopped the sale of those airline tickets that had adopted the zero commission policy and were instead recommending other carriers. SIA bore the brunt of the agents' boycott, so much so that marches were taken out against the Asian carrier with banners asking it to ‘Quit India'.
The stand-off turned out to the benefit of domestic airlines flying the SIA routes, say travel agents, who actively encouraged passengers to make that shift in carriers. Other carriers such as Emirates, Cathay Pacific, Thai Airways and Malaysian Airlines were also said to have seen a surge in passenger numbers when agents stopped selling SIA tickets, the agents added. These airlines fly to Singapore via their respective hubs — be it Bangkok, Dubai or Hong Kong.
The big-boys of the Indian skies, Jet Airways, Kingfisher Airlines and Air India, too, had decided not to pay commission to agents. But a boycott call from agents across India forced them to rollback that decision in a few hours' time.
DGCA directive
Though the new DGCA guidelines direct the international carriers to pay a commission, it does not outline the quantum payable by airlines to agents.
Agents and airlines need to decide this between themselves, “taking into account various commercial factors such as the market conditions, the cost of the agents' establishments, etc and statutory definition of ‘tariff',” said a DGCA source.
The Travel Agents' Federation of India (TAFI) Chairman - Legal and Industry Affairs, Mr P. Sampath Kumar, said the commission issue has been on the boil since 2005. Travel agents' associations had filed a petition in the Karnataka High Court against the Ministry of Civil Aviation and the DGCA against the airlines' intention to reduce commission payable to agents in a unilateral manner. The recent DGCA directive comes even as the issue went through several rounds of discussions and litigation.
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