IAAI launches e-signature campaign to restore travel agency commission
Covid-19 has completely disrupted the travel and tourism industry nationally and internationally for almost two years. Although transformed by technology and wellness advice, the spread of the Omicron variant has imposed travel restrictions, and the industry has lost domestic and international tourists and local visitors. The waves of Omicron have pushed aside the slow recovery that makes our future unpredictable.
Travel business is an economic activity related to the continuous and regular buying and selling of travel-related services to satisfy human needs. Travel agents are the main tourism distribution channels, interconnected with tour operators, tourist guides, host families, tourist boats and taxi operators, including the hospitality sector.
The impacts of the pandemic and the economic fallout have hit travel agents hard. Over the past eleven years, the airline industry has been strained with zero (nil) commission and lately with the pandemic. As an unorganized sector, most travel agents and tour operators are not MSMEs, have not benefited from banks, and have not gotten any government bailouts. The industry has lost its sustainability, and many have left their offices, are out of work, struggling to pay EMI on home or bank loans, have no savings, and are swinging to earn a living. There is no way to meet the needs of families and to gradually become an endangered entrepreneurial profession.
Airline ticketing is the primary source of revenue for travel agents, who regularly contribute more than 60-75% of overall airline business. Agent commission went from 9 to 7, then from 7 to 5, later from 5 to 3, and finally from ‘NIL (zero) commission.
• When the commission fell to zero, the airlines offered no reduction or proportional discount on ticket fares to the public.
• Instead, they offered 5-9% incentives in the form of PLB (Productivity Bonus) to specific privileged agents, consolidators and OTAs.
• Airlines have shrewdly alienated “travel fuel” from the base fare as a separate non-taxable fare element; on the other hand, IATA recommended adjusting the fuel, surcharge or fluctuations at the ticket office to update the FARE.
Airline revenues come from passenger and cargo sales. And like two sides of a coin. Both carried on the same aircraft – Passengers on the main deck and cargo on the lower deck. No commission to ticket agents. Divergently, airlines pay a 5% commission to accredited cargo agents:
Aircraft Rules 1937 and DGCA Regulatory Orders (05.03.2010) based on Kerala High Court Guidelines, and MoCA Order of 16.09.2013 emphasizes that commission is the only legal compensation for travel agents . Excluded that transaction fees, service fees and zero commission are illegal. Also, he had probably proclaimed that PLB could not replace the commission. Unfortunately, vested interests circumvented regulatory orders to compensate agents due to non-unity and turned agents into beggars.
Under the guise of Corona and the new Omicron variant, air fares within and from India remain inflated and extortionate, far higher than any seasonal fares we have ever charged before. Flight inventory is controlled by the airlines and limited to specific preferred agents. Inaccessibility to flight inventory and reluctance of customers to share service fees are the factors affecting agent survival. A new financing and engineering tactic of consolidation and cartelization or monopolization. Airlines make more money with less fleet usage with less service and no commission.
The airline industry in India today is only being privatized. All operations will fall under the privatized sector with a few additional airports. Indian or foreign airlines operating from or within India use these airports and Indian skies. Sooner or later newcomers are gradually joining the bandwagon with the favorable policies of the government.
Privatization will lead to consolidations and cartelization, and the travel agent community will be slowly eliminated or wiped out of this industry. So, before the absolute privatization of our sector, let us fight together to restore our legitimate rights to the commission.
The need of the hour is for the Travel, Tourism and Hospitality sector to take strategic action to survive, build capacity and relaunch services and thrive. To rebuild the travel industry, travel agents need to swim upstream early on, and it takes a lot of hard work.
India’s constitution guarantees equal rights to all, and our law books guarantee that everyone should be treated equally. While these carriers are free to use the Indian skies and take advantage of our port facilities, the travel agents who are the outstretched arms of the promotion and sale of airline tickets are mandatorily required to receive commensurate remuneration for their services. , such as freight agents in India.
The coexistence of travel agents is statutorily and regulatory supported by the law of the land. The IAAI appeals for support and solidarity from travel and tourism operators in India by signing an appeal memorandum to Hon. Minister of Civil Aviation – Govt. of India, for resetting the legitimate commission of the travel agent.
The appeal, under Rule 135, requires airlines to determine fares corroborating the DGCA order of 05.03.2010, imposing a “commission” and displaying the “single consolidated tariff” with a break for the benefit of the consumer and thus order airlines operating to and from India to pay 5% agency commission to travel agents.
Unless travel and tourism stakeholders forget their differences, let’s keep vested interests aside so that trade and industry can join forces to secure our legitimate rights in the aviation ecosystem, including including reinstating the ticket commission before the privatization of the sector completely lost their voice. Most travel agencies are under severe pressure due to lack of business due to coronavirus pandemic restrictions.
The IAAI wants to ensure the survival and well-being of the entire travel and tourism fraternity before the privatization of the sector completely stifles its voice. Our mission in 2022 is survival. Self-preservation is the first law of nature, and WE must survive.
We have called on all travel and tourism-related trade associations to forget the differences and unite to restore our legitimate rights in the aviation ecosystem, including the ticket commission. Stand united to restore the legitimate rights of travel agents to commission before the sun goes down.
Self-preservation is the first law of nature. We, the travel and tourism fraternity, must survive. We need to stay and support our families.
We are not for handouts or bailouts. We want the MoCA (Ministry of Civil Aviation) to implement and enforce the law that mandates the “commission” of travel agents. Our mission is to save the industry where no one is disenfranchised.
As a result, the IAAI is launching a national e-signature campaign, with the option for agents to click on the link http://www.iaai.in/petition/petition.php and validate the appeal memorandum. hon. Minister of Civil Aviation – Govt. from India.
It is high time for the travel industry in the country to pull together and join forces to launch a national campaign to restore our legitimate and pending demand for ticket commission.
Thousands of tour operators and middle-class tour operators are in the same boat. We are optimistic that authorities should listen to the voices of thousands of travel professionals. There is no limit to our collective power. And together we can make a difference.
Albert Einstein said, “We will need a substantially new way of thinking if humanity is to survive.” We need unity to create new knowledge to solve our problems. Unity does not mean uniformity. This implies cooperation in diversity. The need of the hour is for trade associations and all stakeholders to speak with one accord for us to stay and support our families.