Travel Agents may face a further cut in airline commission

Airlines facing huge losses are contemplating various measures, including reduction in commission payable to travel agents and other agencies; Fears of a zero percent regime looming

Travel News
Travel News

Indian airlines that are facing huge losses could further reduce the commission they pay travel agents.

The move is proposed by Indian airline lobby group Federation of Indian Airlines (FIA) in a letter, a copy of which is in possesion of Traveltechie, to various Travel Agents associations including Travel Agents Federation of India (TAFI), Travel Agents Association of India (TAAI) & IATA Agents Association of India (IAAI)

In the letter, Ujjwal Dey, a senior executive officer at FIA, wrote, “You are aware of the financial crisis through which the member airlines of FIA are currently passing. In order to cope with this difficult environment, our members are contemplating various measures, including rationalization of distribution cost or reduction in commission payable to travel agents and other agencies and the like.”

Citing competition law and an order of the Competition Commission of India, Dey went on to warn travel agents against boycotting any airline seeking to remove or reduce the commission.

“We wish to advise you that you should not adopt an adversarial position or take any adverse action (whether individually or in collusion with other agencies), against such measures taken by one or more of the member airlines of this federation or attempt yourself or through any agency to isolate and target individual member airlines, since such an act will constitute violation of the extant competition laws of the country.”

Confirming the letter, Mr. Iqbal Mulla, President of TAAI said,"We have received the letter & have sent it to legal experts for more clarification."

Ajay Prakash, President of TAFI said, "While FIA has written to us, it will be up to individual Travel Agents to decide on their course of action."

Biji Eapen, President of IAAI questioned the authority of FIA in sending the letter. "We have filed various cases in courts of law for restoration of the Travel Agents commission by airlines & the court has even filed an order for the restoration of the commission but unfortunately it is not being implemented" he said. "We are following up with the court for implemention of the said order", he further added.

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