Financial Daily from THE HINDU group of publications
Saturday, Oct 22, 2005
Financial Daily from THE HINDU group of publications Saturday, Oct 22, 2005 |
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Airlines Industry & Economy - Taxation Fuel surcharge issue — Travel agents, global airlines may lock horns again K. Giriprakash
Bangalore , Oct. 21 TRAVEL agents across the country may lock horns with international airlines again even as they consider a move to stop collecting fuel surcharge from passengers on behalf of the airlines. A formal decision, on the move, will be taken once the annual elections of the Travel Agents Association of India (TAAI) gets over later this week. Both TAAI and the Travel Agents Federation of India (TAFI) had stopped selling tickets of international airlines following a decision to reduce their commission to five per cent from seven per cent, but were later forced to withdraw their protest. Terming the fuel surcharge levied by international airlines under the guise of taxes as illegal, both TAFI and TAAI, in a representation to the airlines, said that collection of such a surcharge can be challenged in court. The Associations said if surcharges cannot be avoided, they should be incorporated as part of the actual fare within three months of their levy. For instance, Cathay Pacific has, in a note to travel agents, said the fuel surcharge, which ranges from $11.70 to $45.30 for various sectors, has been revised from October 1. By another note Cathay Pacific directed the travel agents to collect an additional fuel surcharge of Rs 300 from passengers from October 1. This surcharge applies to all categories of fares, including frequent flyer programme and for all passengers. Officials of Cathay Pacific were not available for comments on the airline's directive to the travel agents. The Associations, in a representation to the airlines, said while domestic airlines have already included fuel surcharge as part of the listed fare, most of the international airlines have failed to do so. As the surcharges are not part of the fare construction and are shown separately, travel agents also tend to lose out on the commission from the airline, the associations said. They pointed out that agents are now being compelled to collect non-governmental surcharge under the guise of taxes and pass them on to the airlines, and collection of such surcharge can be challenged in court. Hence, all carriers should ensure that advertised prices include the real cost to the customer, including fees and surcharges as recommended by the International Civil Aviation Organisation. They added that fuel and other surcharges exceed more than 30 per cent of the total ticket value. This could be misleading as the real cost of a ticket is masked by deceptive announcements of lower fares, while the difference could be substantial.
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