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Commissions re-affirmed for Indian agents

September 30, 2013 Corporate, Headline News No Comments Email Email

egtmedia59Indian Ministry of Civil Aviation (MoCA) has re-affirmed commissions as an integral part of air tariff that has to be uniformly paid to travel agents.

In its historic official order released on Thursday, K N Shrivastava, Secretary, Ministry of Civil Aviation, Government of India has upheld Kerala High court order of 5th March 2010 which ruled that airlines are bound to pay ‘commission’ to travel agents as per Rule 135 of Indian Aircraft Rules 1937.

The order came in response to an appeal made by IATA Agents Association of India (IAAI) against Federation of Airlines’ (FIA) contention of 6th February 2013 justifying transaction fee model.Biji Eapen IAAI President

Biji Eapen, IAAI President told eGTM: “It’s a historical victory for agents. Justice is served, though after a long delay.  Travel agents play a major role in the sale of airline tickets. FIA itself has admitted in its appeal to MoCA that 60 to 75 percent of their business comes through 20,000 travel agents spread across India.”

MoCA order states that it’s logical for intermediaries (agents) to get compensation since foregoing submissions of the FIA clearly establish that intermediaries play a significant role in the sale of airline inventory by rendering their services to air travelers.  Since keeping any fee outside the ambit of tariff is likely to adversely affect the objective of transparency, it is best that it is part of the tariff. That is also the intent of legislation and that is why the ‘commission’ is part of the tariff.

Rule 135 (2) of Indian Aircraft Rules 1937 requires that airlines display a single consolidated fare along with a break-up of different components of the tariff for consumers benefit.  The breakup has to include commission payable to agents.

MoCA has left the decision on the extent of commission to airlines, which they can arrive at in consultation with travel agents.

Eapen said: “We’ll initially press for five percent commission. Later on arrive at the quantum after consultation with our members.”

Written by Anand & Madhura Katti

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