The Hindu Business Line : Bangalore agents return tickets to AI as rift widens

THE rift between airlines and travel agents has widened, with Air India along with Lufthansa and British Airways withdrawing their stock of tickets from six travel agents in Bangalore.

In retaliation, most of the travel agents based out of Bangalore on Tuesday surrendered Air India's stock of tickets.

Air India targeted these six agents after they returned the publicity material a week back in protest against the airline's decision to reduce the agency commission to five per cent from seven per cent from May 1, the Travel Agents' Federation of India (TAFI), Karnataka Chapter Chairman Mr Sampath Kumar and the Travel Agents' Association of India (TAAI) Karnataka Chapter Chairman Mr Niranjan Gupta told Business Line.

Mr Sampath Kumar said that Air India had targeted agents from Bangalore and not anywhere else in the country.

He said that most of the members of TAFI, TAAI, and related associations have returned their stock of tickets too.

Hence, from Wednesday, travel agents in Bangalore will stop selling Air India's tickets while travel agents across the country will follow suit from April 1.

Mr Sampath Kumar said that reduction of commission by two per cent would bring down the travel agents' revenue by 30 per cent.

"Agency commission is a compensation to travel agents for the work they do on the airline's behalf, which includes selling, handling, servicing and processing traffic."

A few months back, when a few European and American airlines lead by Lufthansa decided to reduce commission from seven per cent to five per cent, Lufthansa had to face a boycott by all travel agents, which forced it to withdraw the move.

Mr Sampath Kumar said that the decision of the airlines to reduce the commission terming the same as a burden on their "distribution costs" was wrong because it was in effect "cost of sale", since commission paid is a form of remuneration for services rendered to the customer by the agent on behalf of the airline.

He added that it was mandatory on the part of airlines to give commission as they outsource sale of tickets to travel agents reducing their workload. According to him, travel agents generate over 80 per cent of the business for airlines.

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