Air India's announcement to reward IATA agents with two per cent incentive on top of the original one per cent commission beginning April 1 has drawn mixed response from travel agent associations in the country.
The move is expected to help Air India consolidate its base of IATA travel agents, who were otherwise buying airline tickets through intermediaries due to the better commissions offered.
“Air India doesn’t have a large percentage of ticketing coming through IATA agents. Our proposal was that most IATA agents should directly buy from Air India and not be tempted to buy from an intermediary, said Sunil Kumar, president of TAAI, a key proponent of the airline's revised incentive scheme.
"It is important that irrespective of any target, IATA agents must be rewarded with better margins," added Kumar. "The intermediaries should not be given higher remuneration in the name of performance-linked bonuses (PLBs) when the business they offer is coming through other agents."
Many airlines in India offer PLBs ranging from three to nine per cent to favoured travel agents and OTAs.
Praveen Chugh, president, Travel Agents Federation of India (TAFI), commented: “Air India has moved in the right direction, but the income of a travel agent who was earlier earning one per cent commission plus four to five per cent PLB has gone down to three per cent. Ideally, Air India should have announced three per cent commission plus PLBs as its new model.”
On the other hand, the move has received flak from IATA Agents Association of India (IAAI), with national president Biji Eapen labelling Air India’s new offer as "just an eyewash".
He remarked: "These incentives are temporary and can be deferred or withdrawn without prior notice. It is very sad to see that some associations are still beating around the bush to claim this as an achievement. The law clearly mandates that PLB or transaction fee or such incentives cannot replace a commission.”