Travel agents seek govt help in payoff spar

Indian travel agents have sought the government's intervention to end the deadlock over the proposed lower commission rates by international airlines.

According to sources, agents have written to both Civil Aviation Minister Praful Patel and Tourism Minister Renuka Choudhary for immediate intervention to end the crisis.

They have pointed out to the government that such a move by the airlines will hamper the growth of tourism as well as the civil aviation sector. Travel agents are also trying to rope in other sections of the trade to rally with them.

A negotiation between travel agents and representatives from international airlines will be held early next week to work out an amicable solution.

Travel agents point out that of the 45 international airlines that operate from the country, only six have decided to cut commission rates.

Besides, they fear that if the six airlines go ahead with the move, other airlines will follow suit. Travel agents also threaten to block ticketing services to airlines that have cut the commission rates and will divert traffic to airlines offering them higher commission.

However, such a step will be taken only if the talks with airlines fail. This will be the first time such a deadlock has cropped up in the Rs 10,000 crore airline ticketing industry in India.

Travel agents say the move will not just hamper the revenue, but will also lead to loss of employment. They are fearing an immediate loss of revenue to the tune of Rs 100 crore, which may go up to Rs 200 crore in the long run.

"We want to negotiate with the airline companies to reconsider their decision. If they do not, we will look at other measures," said Balbir Mayal, president, Travel Agents Association of India (TAAI). Mayal also hopes that the government will take a favorable stand on the issue since state-owned carrier Air-India is yet to take such a step.

British Airways and Lufthansa are among the airlines that have cut the agents' commission to manage cost. According to airlines, the decision to cut the commission reflects a change in market conditions and is consistent with the airline industry's strategy to manage its cost base, a key element of which is distribution cost.

In many parts of the world, carriers are reducing remuneration to agents and the latter are charging additional fees for services.

Airline industry point out that some of the European carriers have cut commission rates in international market to zero from seven per cent. However, travel agents say this move is aimed at forcing them out of business.