INDIA'S Ministry of Civil Aviation (MoCA) has ruled that airlines must pay travel consultants commission for the sale of seats, a much-debated issue in India's travel industry. However, it did not stipulate a rate, to the chagrin of the trade.
The order by the ministry’s secretary K N Shrivastava, recognised that intermediaries played a “significant role in the sale of airline inventory” and that “intermediaries do render service to air travellers”.
“Therefore, it is quite logical that intermediaries get compensation that is equitable, fair and based on the work-done principle. Since keeping any fee outside the ambit of a tariff is likely to adversely affect the objective of transparency, it is best that (it) is part of the tariff,” wrote Shrivastava.
According to the order, airlines will then have to determine a tariff including commissions to go towards travel consultants, and display both single consolidated fares and the fare breakdown for consumers, applying to all airlines that fly to and from India, including LCCs.
Without a set rate of commission, airlines, IATA-approved ticketing agencies and trade associations are expected to work together on a formula.
Biji Eapen, president of the IATA Agents Association of India (IAAI), said: “This verdict is a victory for travel consultants in India. IAAI has been fighting for consultants’ right to commissions for a long time, including going to court. IAAI will soon meet each airline to fix the quantum of commission.”
However, Iqbal Mulla, president of the Travel Agents Association of India (TAAI), commented: “The decision is unclear and there is no proper direction to travel consultants, airlines and other stakeholders. The quantum of commission is not defined. We will be consulting our legal counsel to take the matter further. TAAI will fight for five per cent commission.”
The Delhi High Court had instructed MoCA’s secretary to investigate the matter and include IAAI as party to the discussion after having received a petition from the Federation of Indian Airlines about the Directorate General of Civil Aviation’s restriction on airlines imposing transaction fees (TTG Asia e-Daily, January 28, 2013).