Travel agents association hauls Air India's NACIL to court on commissions issue

07 August 2008

New Delhi: The row over the cancellation of agents commissions for sale of airline tickets has escalated further with a travel agent lobby group moving court against the National Aviation Co of India Ltd (NACIL), the holding company that runs the newly merged entities of Air India, Indian and other state-owned airlines, challenging its decision to stop paying commissions on ticket sales starting November.

The case, filed in the Kerala High Court by the IATA Agents Association of India (IAAI), alleges breach of contract by NACIL.

IATA is short for International Air Transport Association, a global aviation industry group.

The IAAI case is based on an April 2005 letter sent to it by PP Singh, then Air India's regional director and now chief operating officer of Nacil's international low-fare subsidiary Air India Express, committing to pay a 5% commission on tickets for four years in the period 1 May 2005 and 30 April 2009.

Contrary to the commitment, airline agents received a letter from Air India on 1 June 2008 informing them of the flag carrier's plan to do away with commissions altogether from November this year.

''This is illegal and contrary to the written assurance given to us by Singh in 2005,'' said Biji Eapen, president of IAAI, which counts nearly 600 out of 2,800 travel agents in the country as  members of its association. ''Even the government will lose money if zero commission is implemented, as the government makes 12.36% in service tax from these commissions as well as 11.33% income tax on (commission) revenues.''