Covid-19 has wholly disrupted the Travel and Tourism Industry at national and international levels for close to two years. Though transformed by technology and wellness tips, the spread of the Omicron variant forced travel restrictions, and the Industry has lost domestic and international tourists and local visitors. The Omicron waves sidelined the slow recovery that makes our future unpredictable.
Travel business is an economic activity related to continuous and regular buying and selling of travel-related services for satisfying human wants. Travel agents are the primary distribution channels for tourism, interconnected with tour operators, tourist guides, homestays, tourist boats and taxi operators, including the hospitality sector.
The impacts of the pandemic and economic fallout severely hit the travel agents. Past eleven years, the air travel sector has been outstretched with zero (nil) commission and lately with the pandemic. As an unorganized sector, most travel agents and tour operators are out of the MSME ambit, neither benefited from banks nor got any bailouts from the government. The Industry lost sustainability, and many have vacated offices, are jobless, find it hard to pay EMI on home or bank loans, have no savings and swinging for livelihood. No means to support families and gradually become an endangered business profession.
Air ticketing is the primary source of income to travel agents, who consistently contribute over 60-75% of the overall business to the airlines. Agents commission dropped from 9 -7, then 7- 5, later 5- 3, and finally ‘NIL (Zero) Commission.
• When the commission plunged to zero, airlines did not offer any proportionate reduction or discounts in ticket fares to the public.
• Instead, they offered 5 to 9% incentives as PLB (Productivity Linked Bonus) to specific favoured agents, consolidators and OTAs.
• Airlines perceptively alienated ‘trip fuel” from the base fare as a distinct non-taxable Tariff component; in contrast, IATA recommended adjusting the fuel, surcharge or fluctuations at ticketing to update the FARE.
Airline revenue is generated from passenger and cargo sales. And like the two sides of a coin. Both carried on board the same aircraft – Passengers in the main deck and cargo on the lower deck. No commission to the ticketing agents. As a divergent stand, Airlines are paying 5% commission to accredited cargo agents:
The Aircraft Rules 1937 and the regulatory orders from DGCA (05.03.2010) based on the Kerala High Court directives, and MoCA order of 16.09.2013 underline that commission is the only legal remuneration to travel agents. Ruled out that transaction fee, service fee and zero commission are illegal. Also, it had undoubtedly proclaimed that PLB could not replace commission. Unfortunately, the vested interests circumvented the regulatory orders to remunerate agents due to non-unity and made agents be panhandlers.
In the pretext of Corona and the new variant Omicron, airfares within and from India remain inflated and exorbitant, much higher than any seasonal fares we had ever earlier. Flight inventory is controlled by airlines and confined to specific favoured agents. Inaccessibility to flight inventory and customers’ unwillingness to part service fees are the factors that affect agents’ survival. A new tactic to funding and engineering consolidation and cartelization or monopolization. Airlines make more money with fewer fleet utilization with less service and nil commission.
The airline industry in India today is solely being privatized. The entire operations will be under the privatized sector with few more airports. Indian or foreign airlines operating from or within India use these airports and Indian skies. Sooner or later, newcomers join the bandwagon steadily with the government’s favourable policies.
Privatization will lead to consolidations and cartelization, and the Travel Agents community will slowly be eliminated or wiped out from this Industry. Hence, before the absolute privatization of our sector, let us together fight to re-establish our legitimate rights for commission.
The need of the hour is for the travel, tourism, and hospitality sector to strategically take steps for survival, build capacities and services for revival, and thrive. To rebuild the travel sector, travel agents have to swim upstream early on—and that requires a lot of hard work.
The constitution of India guarantees equal rights to all, and our law books warrant everyone should treat equally. While these carriers are at liberty to use Indian skies and benefit our ports facilities, travel agents who are the extended arms in promoting and selling Air tickets must obligatorily receive proportionate compensation for their services, like the cargo agents in India.
The coexistence of travel agents is supported statutorily and regulatory by the Law of the land. IAAI is urging the support and solidarity of travel and tourism operators in India by signing an Appeal Memorandum to The Hon. Minister for Civil aviation – Govt. of India, for re-initiating the travel agent’s legitimate commission.
The appeal, under rule 135, requires that airlines determine Tariffs corroborating DGCA Order of 05.03.2010, mandating “commission” and displaying the ‘single consolidated fare’ with break-up for the consumer’s benefit and thereby instruct Airlines operating To and From India to pay 5% Agency commission to Travel Agents.
Unless the stakeholders in travel and tourism forget differences, keep vested interests aside so that the trade and industry can join forces to get our legitimate rights in the aviation ecosystem, including ticket commission re-established before the privatization of the sector steamrolls their voice completely. Most of the Travel Agencies are reeling under severe pressure due to lack of business due to the restrictions of coronavirus pandemic.
IAAI wants to ensure the survival and welfare of the entire travel and tourism fraternity before the sector’s privatization steamrolls its voice completely. Our mission in 2022 is survival. Self-preservation is the first Law of nature, and WE must survive.
We have requested all travel and tourism-related trade associations to forget differences and join hands to re-establish our legitimate rights in the aviation ecosystem, including ticket commission. Unitedly stand to re-establish travel agents’ legitimate rights for commission before the sunset.
Self-preservation is the first Law of nature. We, the travel and tourism fraternity, has to survive. We have to stay and support our families.
We are not for charity or bailouts. We want MoCA (Ministry of Civil Aviation) to implement and enforce the Law that mandates “commission” to travel agents. Our mission is to save the Industry where no one is deprived of Law.
Accordingly, IAAI is initiating a nationwide e-signature campaign, with a facility to agents to click the link http://www.iaai.in/petition/petition.php and validate the Appeal Memorandum to The Hon. Minister for Civil Aviation – Govt. of India.
It is high time the travel trade in the country get their acts together and join forces to commence a national campaign to get our long-pending and legitimate demand for ticket commission re-established.
Lakhs of middle-class travel and tour operators are in the same boat. We are optimistic that the authorities would have to listen to the voice of thousands of travel-related professionals. There’s no limit to our collective power. And together, we can make a difference.
Albert Einstein said,” We shall require a substantially new manner of thinking if humankind is to survive”. We need unity to create a new cognizance to solve our problems. Unity does not mean uniformity. It implies cooperation amid diversity. The need of the hour is that Trade Associations and all stakeholders must speak with one accord that makes us stay and support our families.
