Pay commission to agents or face the music: DGCA to KLM Royal

New Delhi: In what appears to be a clear victory for thousands of travel agents in the country, the aviation sector regulator Directorate General of Civil Aviation (DGCA) has asked KLM Dutch Royal Airlines to pay commission to the agents.
Over a dozen foreign airlines including British Airways, Lufthansa and Singapore Airlines had in 2008 decided to stop paying fixed commission to agents and introduced a transaction-fee based model. While the fixed-commission regime requires airlines to pay a certain part of the ticket price as commission to agents, travel agents collect a fee ranging from Rs 250 to Rs 3,000 from passengers for booking the ticket. Over 85% airline tickets are currently sold through travel agents.
Objecting to airline’s decision to follow zero-commission regime, nearly 2,400 travel agents under the banner of Travel Agents Association of India (TAAI), Travel Agents Federation of India (TAFI) and IATA Agents Association of India (IAAI) had moved court. The agents filed petitions in Kerala and Karnataka High Courts.
Later, the Kerala High Court asked the DGCA to examine the issue and see if the airlines’ decision was in accordance with the law. Following this a DGCA directive upheld travel agents’ demand to reinstate commission but it did not quantify the amount leaving it to negotiation between the two parties. So far most of the airlines interpret the regulatory directive to their own interests.
02/08/10 Nirbhay Kumar/Financial Express

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Categories: Foreign Aug 2010, Indian Aviation- In General Aug 2010