The Hindu Business Line : Travel agents to strike work on April 8

TRAVEL agents across the country will go on a day's strike on April 8 to protest against the decision by Air India and a few European carriers to reduce the agent's commission to 5 per cent from 7 per cent, from May 1.

This decision comes close on the heels of the travel agents' action to suspend sale of Air India tickets.

A Travel Agents' Federation of India spokesperson told Business Line that, in spite of holding a meeting with Air India's top brass, the airline had decided to stick to its decision to reduce the commission.

"We have no alternative but to go on a day's bandh," he said.

The spokesperson said if the travel agents accept the decision of the airlines, most of them would have to close shop, thus rendering about a lakh jobless.

It will also affect about two lakh people who are indirectly associated with the industry.

Sources in the industry claimed that in Japan, Air India and other foreign airlines pay a commission of around 9 per cent to travel agents.

Hence, the airlines' decision to reduce the commission to agents in India is not justified.

According to industry sources, all travel agents together generate revenues of about Rs 20,000 crore from sale of tickets of Air India, Indian Airlines and international airlines.

At a 7-per cent commission, the airlines pays about Rs 1,400 crore to the agents for carrying out their ticketing work.

If the commission is reduced to 5 per cent, the earnings would drop to about Rs 1,000 crore.

The difference of Rs 400 crore will go to the airlines.

Out of this, Rs 100 crore will go to Air India and Indian Airlines and the remaining to the foreign airlines, which would repatriate these earnings to their home countries, as their earnings are not taxable in India.

Hence, the Government will stand to lose out on tax receipts worth Rs 100 crore if the agents' commission is reduced by 2 per cent.

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