Airlines in India must pay commission

International airlines operating in India could be forced to start paying commission to travel agents again following a directive issued by the Directorate General of Civil Aviation (DGCA) in March.

Thirteen international airlines started operating a zero commission system from November 2008 in a move fiercely opposed by travel agents in India.

The regulator has asked that the airlines reconsider this policy and negotiate new commission terms with travel agents.

Rajji Rai, president, Travel Agents Association of India (TAAI) which spearheaded a campaign against zero commission said the directive was a big victory for travel agents in India.

He told The Hindu: “We still have to meet with the airlines to thrash out the commission payable to us…We are very comfortable if the commission goes back to pre-November 2008 levels of 5 percent, although the rate has to be negotiated.” So far no deal has been reached.

Despite strong opposition among many agents in the GCC for zero commission, Leo Fewtrell, manager, Dubai Travel and Tour Agents Group (DTTAG) told Arabian Travel News that it was unlikely such a decision could ever be replicated in this region.

“It will certainly be interesting to see if the airlines are forced to re-introduce commissions to the agents. If so, it will certainly buck the global trend and be a salutary lesson to many of the carriers,” said Fewtrell.

“As far as it being mirrored in the GCC, I personally have my doubts. The Indian agents are able to work together to face such problems and also get strong support from the Indian Directorate General of Civil Aviation. Airlines that discontinued commissions will be reluctant to recommence, particularly in the current economic scenario.”

Fewtrell added that the reversal of zero commission would not always be a positive step: “Certainly it would be beneficial for many agencies but not for those who would immediately revert to undercutting and discounting the commissions to the consumers yet again.”