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Airlines agree in-principle to include transaction fee in air tickets

At a joint meeting conducted today in Mumbai between travel associations – Travel Agents Association of India (TAAI), Travel Agents Federation of India (TAFI) and IATA Agents Association of India (IAAI) and the airlines – Air India, Jet Airways and Kingfisher Airlines to discuss the pertinent zero commissions regime, the airlines have agreed in-principle to include the transaction fee in the ticket. This demand of including the transaction fee in the ticket was discussed and decided at the all-associations meet that took place in Mumbai earlier this week. “The airlines have agreed in-principle to include the transaction fee model in the ticket, though the figure included in the ticket is not yet decided,” informed C V Prasad, President, Travel Agents Association of India (TAAI). However, no decision was taken at today’s meeting with regards to extending the deadline for bringing into force the zero commission regime from November 1, 2008 to May 1, 2009.

An expert panel consisting of members of both the associations and airlines will hold a meeting on August 21, 2008 to discuss the technical, taxation and customer relationship services that need to be resolved in order to include transaction fee in the ticket. “To include transaction fee into the ticket, it requires technical changes, tax issues need to be addressed and customer relationships have to be taken care of,” stated Prasad. Further more, the demand of airlines paying Service Tax on Productivity Linked Bonus (PLB) was agreed upon in-principle by the airlines. The airlines have also showed positive response on the demand of giving insurance cost for travel agents.

However, IATA Agents Association of India (IAAI) has refused to accept the transaction fee model and has pushed forward their list of demands to the airlines. Airing his views on not accepting the transaction fee model, Biji Eapen, President, IAAI said, “We decline to accept the transaction fee model as the Indian market is not ready for the same. Agency commission is our legitimate right.”

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