Air India has reduced the assured incentive on ticket sales for IATA-accredited domestic travel agents to 0.5 per cent for this fiscal, a move that has been opposed by the travel agents' body TAAI.
However, an Air India spokesperson said it has not reduced incentive to travel agents.
"On the contrary, it has increased the total incentive by 10 basis points. The only change is with regards to the structure of the incentive, which is now based more on the performance of the agencies. Also, the new policy allows additional 900 IATA agents to earn productivity based incentives of up to 1.5 per cent, which was not there in the earlier policy," the spokesperson said.
The Travel Agents Association of India (TAAI) has urged Air India to withdraw its decision with immediate effect and give a minimum of 3 per cent incentive/commission to its members and the IATA-accredited agents.
The airline was offering a 1 per cent assured incentive in India BSP.
BSP is a system designed to facilitate and simplify selling, reporting and remitting procedures of IATA-accredited sales agents as well as improve financial control and cash flow for airlines.
The International Air Transport Association (IATA) is a global grouping of airlines.
"Approval is accorded to reduce the assured incentive from 1 per cent to 0.5 per cent (BF+YQ) for domestic and international for India BSP agents," Air India said in a circular on October 31.
The revised incentive is effective from November 1 on all the tickets issued by BSP India agents, it said.
In a letter to Air India Chief Commercial Officer Nippun Aggarwal, TAAI, on Monday, said the grouping is "shocked to note that an airline like Air India has reduced the incentives to a mere 0.5 per cent with immediate effect".
"On the contrary, we were expecting an increase to a minimum of 3 per cent for the efforts undertaken by our member agents to book and sell Air India inventory along with collection of total airfare and assure payments to the through IATA," the letter said.
TAAI has marked a copy of its letter to civil aviation minister Jyotiraditya Scindia and civil aviation secretary Rajiv Bansal.
"We would appeal to your good offices to kindly withdraw the said communication with immediate effect and reinstate a minimum of 3 per cent incentive/commission to the IATA-accredited agents and members of TAAI," it said.
According to TAAI, its members also provide a bank guarantee/ financial security to IATA which permits the agents to sell the airline's tickets.
With ticket prices averaging Rs 5,000 to 7,000 on domestic sectors, a 0.5 per cent the base fare shall not even be Rs 15, an amount which does not even assist to meet a fraction of our costs, TAAI said.