Ref: IAAI/002/G/2022
18th January 2022

Dear Trade Partners

Sub: Travel Agents & Tour operators - A way to survive, revive and thrive

Season's greetings
It is possible to plan for 100 years, but impossible to predict what will happen tomorrow!
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. Agents who restarted functioning find it challenging to meet both ends. The spread of the new variant Omicron is alarming. Travel restrictions and travel bans continue to affect many parts of the world even today.
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, taxies and luxury coaches, cruise, restaurants and resorts, including the entire hospitality sector.
Travel agents represented and sold airlines tickets and were remunerated with the commission, like cargo agents, LIC agents, and petroleum dealers. Unfortunately, the vested interests discriminately circumvented regulatory orders to indemnify ticketing agents.
Self-preservation is the first Law of nature, and WE have to survive. Our mission in 2022 is survival. Since Travel & tourism is an unorganized sector, we at IAAI, on behalf of the entire travel and tourism fraternity, are working on specific projects that make us stay and support our families.
We don't want any sympathy. We only ask the MoCA (Ministry of Civil Aviation- Government of India) 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.
Lakhs of middle-class Indians are in the same boat, and you may be one among us, or you know someone who needs support. Do not leave hopes. We are optimistic that if we had the support of thousands of travel-related professionals like you, the authorities would have to listen to us. There's no limit to our collective power. And together, we can make a difference.
On behalf of the travel and tourism fraternity in India,
IATA Agents Association of India (IAAI) Director Board

Request to Travel & Tourism Industry stakeholders in India for submitting an Appeal Memorandum to Shri Jyotiraditya Scindia, Hon. Minister for Civil Aviation - Govt. of India

Dear Sir/Madam,
Greetings from the IATA Agents Association of India
IATA Agents Association of India (IAAI) National Committee would like to invite your attention to the following aspects regarding the post-COVID-19 scenario of India's Travel & Tourism Industry.
An overview
Coronavirus pandemic severely smashed the Travel & Tourism in India. The economic recovery downed, flexibility in spending on luxury has declined due to unemployment and worries about likely job losses in the future. Travel & tourism are the two sides of a coin that compliments each other. And there is no tourism without Travel.

Travel agents are an essential part of the distribution setup of the aviation and hospitality industry, including tourism destinations. Traditionally consultants, professionally guide and assist corporates and other passengers on travel requirements and formalities. The industry-supported around 5 million self-employed and salaried, including their families, depend on the daily income generated from the airline ticket sale. More than 10 million families involved in allied services indirectly depend on airline ticketing for shelter and food.
When the crisis posed a threat to financial stability, many could not feed themselves or their families without the means to earn an income during lockdowns. With years of hard work, dedication, many vacated offices, few sold their vehicles, and unfortunately, some turned to be street sellers - selling vegetables or fresh fish at roadsides or home delivery. Significantly very few offices only started functioning and find it challenging to make ends meet. Landlords, also not extending any rent adjustments or deferrals today.
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 both are carried in the passenger cabin and cargo compartments, respectively, onboard the same aircraft. As a divergent stand, airlines are paying commission to accredited cargo agents:

• Cargo agents are paid a 5% commission through MoCA intervention vide Order AV 13030/7/2006A dated 29.08. 2007 and directed to provide air waybill stock to all accredited agents in India.

Travel agents represent and sell airlines tickets like cargo forwarders, LIC agents or petroleum dealers through an unorganized sector. Unfortunately, the vested interests circumvented the regulatory orders to remunerate agents due to non-unity.

Statutory & regulatory rules supporting commission:

The Aircraft Act 1934 and the Aircraft Rules 1937 support travel agents' existence and survival. Both regulatory orders from DGCA dated 05.03.2010 and MoCA dated 16.09.2013, where IAAI is the petitioner and party to the cases, precisely underlines that commission is the only appropriate remuneration to travel agents.

• Aircraft Rules 1937 categorically identified functional activities and defined the terms and conditions in Rule 3(54-A). - "Tariff" means any fare, rate or charge collected by an Air Transport undertaking for the carriage of passengers, baggage or cargo, including the commission payable to the agents, and the conditions governing such Fare, rate or charge.


• Referring to Kerala High Court directives on national Law, DGCA has passed Order No. AV. 26012/2/2008-TE dated 5 March 2010 mandating "Commission" as the legal remuneration to travel agents and categorically ruled out that zero commission, transaction fee and net fares as illegal in India, and mentioned that PLB could not be replaced as commission.


• In the Order, No. AV.13030/34/2013-DT dated 16.09.2013, Secretary, MoCA allowed airlines to sell their products directly. Unambiguously declared that airlines are bound to indemnify agents if sales are assigned through intermediary or Travel agencies.

DGCA had issued notices to 16 airlines for regulatory compliances in July 2010; inversely, the vested interests, hand-in-glow with airlines, diluted this Order of 05.03.2010 and made agents be the panhandlers.

The present situation

With the accelerated inflation at 14.23%, coupled with the new variant Omicron, considered thrice more contagious than Delta, the travel industry is blindsided by the global health crisis, divulging cracks in our facet of livelihood. Stabilization of flights and retrieval of tourism is volatile and time-consuming.
In reality, travel and tourism industry employees or self-employed people are swinging for livelihood and no means to support our families, becoming endangered business or profession.
The airline industry in India today is solely privatized. Many airports have already been denationalized, and a few more are in privatization. All Indian and foreign carriers commercially use our ports and skies to transport passengers, cargo and civil mails to, from and within India. Sooner or later, newcomers also join the bandwagon.
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. Airlines commercially make more money with fewer fleet utilization, without services and nil commission.
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 commensurate compensation for their services, like the cargo agents in India.
However, statutory rules and regulatory orders support our coexistence; nobody has yet provided travel agents with any support or guidance. Hence, corroborating Rule 3 (54-A) and DGCA order on 5 March 2010, we urge your support and solidarity through signing the Appeal Memorandum to The Hon. Minister for Civil aviation - Govt. of India, with the following demands: