The impasse over payment of commissions to airline travel agents continues. The matter has now been placed before the Union law ministry. An official from one of the travel agents' organisations who has been informed by a high-level official from the Directorate General of Civil Aviation (DGCA) said the civil aviation ministry is awaiting a nod from the law ministry on the final assessment. "The latter will decide whether the DGCA is a competent authority to decide whether it is mandatory for all carriers operating out of India to pay commission to travel agents," a source said.

Over the last few years, the commission rate paid by carriers to travel agents has steadily come down from a peak of 9-7% to the current 5-3%. While the domestic full-service carriers like Jet Airways, Kingfisher Airlines and Indian offer 3% commission, the low-cost carriers charge a service fee which is not linked to the base fare, but is levied in the form of a flat fee.

While some foreign airlines are offering a 5% commission, about 16-18 companies are working on a zero-commission basis. However, agents said that Resolution 810i of the International Air Transport Association (IATA) indicates that all travel agents would be remunerated reasonably by airlines.

"The matter was referred to the law ministry because many carriers said that the so-called remuneration could also be paid in terms of productivity. But this is not a viable solution because these terms are not conditional," said an agent. "We plan to write to the DGCA next week to get an update on the matter," Pradeep Lulla, president of the Travel Agents Federation of India (TAFI), has said. Rajji Rai, president of the Travel Agents Association of India (TAAI) said, "The civil aviation ministry must take a strong decision in favour of the commission regime if the travel industry has to survive." Around 2,500 agents in India operate under the IATA but there about 50,000 non-IATA agents - mainly small players - whose survival is at stake. These mom-and-pop agents rely on ticketing as their main revenue channel.

Many agents, big or small, have been diversifying of late by becoming dedicated franchisee of a particular travel company, selling IRCTC bookings, expanding forex activities, creating domestic packages etc, all of which, according to travel agents, offer margins of 10% and above.