Indian travel trade close "to crisis point"

zoom

At least half of India's travel agent community could be out of a job if airline commission cuts go ahead, an agency body chief has claimed.

According to Travel Agents Federation of India (TAFI) national general secretary Ajay Prakash, at least 20,000 travel agent jobs could be axed if India's airlines are allowed to slash commission payments to zero.

"We are on the brink of a huge crisis," he told Arabian Travel News. "If these commission cuts go ahead on November 1, we are looking at a large human calamity."

He explained that three of India's largest carriers - Air India, Jet Airways and Kingfisher - had announced plans to cut agent commission to zero on November 1.

The problem with this, he said, was that while these carriers expected agents to charge a service fee on airline ticket transaction, the airlines themselves would not be doing the same.

"They don't seem to realise that in India, agents sell 85% of all air tickets sold and at the same time, the Indian consumer is not used to paying charges for services such as this," he said.

"There is not other industry or business where you charge like this - can you imagine if you went to a store to buy a packet of chips and the shopkeeper charged you extra for serving you?"

Prakash said agents were fuming that there was no Government-imposed regulatory body to crack-down on airlines who threatened travel agency business.

"We have a Telecommunications Regulation Authority of India and an Insurance Regulation Authority of India, but nothing for civil aviation," he said.

"We have approached the Civil Aviation Minister of India, but there has been no response," he added.

Agents' only hope, he continued, was that one agent in Calcutta had filed an injunction against the airlines imposing 0% commission.

It pertains to the passenger sales agency agreement, IATA resolution 824, section 9, which stresses that member airlines must provide adequate remuneration to their agent partners.

"The problem is, it depends how the court view remuneration," said Prakash. "The case will be heard on November 5 so we will have to wait and see."

Prakash concluded that agents would be willing to compromise if forced to do so.

"The airlines should do some hand-holding for a year - keep paying us commission and teach us how to introduce fees," he said.

"This would allow agents breathing space to decide if they wanted to be an IATA agent or not."

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM