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Airlines defer commissions cut to November 1, 2008

In a recent development, airlines such as Air India, Jet Airways and Kingfisher Airlines have announced their intent to defer the cut of commissions to travel agents to November 1, 2008. The decision is a result of the recent meeting held between heads of travel associations (TAAI, TAFI and IAAI) and the airlines on July 24, 2008. This is just a month’s extension from the earlier announced date of October 1, 2008. As per the presentation conducted on July 24, the associations had recommended an extension of the implementation of zero per cent commission to May 2009. According to a reliable source in Air India, “The reduction in commission structure from five to zero per cent has been deferred to November 1, 2008. No further considerations have been taken as of now.”

Commenting on the issue from an association point of view, Praveen Chugh, President, Travel Agents Federation of India (TAFI) said, “We are not at all happy with the decision of the airlines. The airlines don’t understand the implications of implementing zero per cent regime. We gave them a presentation which highlighted the situation of the travel agents post the implementation of zero per cent regime. The corporate and travel agents contract with the airlines, which are signed for the financial year, will see the service fee doubling due to the implication of the zero commission regime. Air India conveyed the decision followed by Jet Airways and Kingfisher Airlines.” The airlines and the association are expected to meet again between August 11-18, 2008.

Similar views were aired by Biji Eapen, President, IATA Agents Association of India (IAAI), “Air India should not have done this and looks more like a pre planned arrangement. If the airlines call us our partners, they should have considered our situation due to the implementation of the zero commission regime.” When contacted, CV Prasad, President, Travel Agents Association of India (TAAI) was travelling and did not wish to comment on the issue with out consulting the association managing committee.

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