Silver lining emerges in India’s zero-commission fight

THE one-day shut down by travel agencies across India early this month in protest against airlines’ zero commission policy is yielding small seeds of hope, with movements in the trade suggesting that both government and trade stakeholders are addressing the situation.

Two days after the nation-wide protest, (TTG Asia e-Daily, May 7, 2013) the Directorate General of Civil Aviation (DGCA) met with Iqbal Mulla and Sunil Kumar, president and honorary secretary general respectively of the Travel Agents Association of India (TAAI), the body behind the May 7 movement.

The DGCA promised to act as an intermediary and has since approached India’s Ministry of Civil Aviation, while TAAI and the Travel Agents Federation of India are holding off appeals to the Supreme Court against the ruling that airlines were not to charge a transaction fee in any form.

TAAI and TAFI have also convened with Jet Airways’ chairman, Naresh Goyal, who has appointed two key senior officials to sort out the commission issue. Jay Bhatia, chairman – Western region, TAAI, said that Goyal “promised to work out a viable solution” to the situation.

Jet Airways has also assured consultants that web parity would be maintained so that online fares offered by the carrier would not undercut those sold by consultants.

Separately, SpiceJet has reinstated its one per cent annual productivity bonus for travel consultants, which was withdrawn on May 1.

However, the protest has not stopped Air India and Jet Airways from unbundling their services on May 13. Free baggage allowances were cut and excess baggage tariff was increased.

Some have also been unsympathetic to the cause. Mario M Hardy, vice president – Asia-Pacific, UBM Aviation, said: “In North America and Europe, practices of airlines paying commissions stopped a long time ago…The smart (agencies) will adapt, the ones that don’t will just disappear.”

The protest took place during the peak travel month for India and saw about 2,500 IATA and 10,000-12,000 non-IATA travel agencies keeping their shutters down to show support. Confirmed losses for IATA airlines in Mumbai alone stood at Rs2.25-2.45 million (US$40.5-44.1 million).

By Renuka Vijay Kumar

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