SIA threatens to withdraw ticketing rights

P.R. Sanjai & Sudha Menon

The stand-off between India’s travel agents and Singapore Airlines Ltd has taken a new turn with the carrier threatening to withdraw ticketing rights.

Responding to this, Ajay Prakash, national general secretary of the Travel Agents’ Federation of India (Tafi), said: “We have got nearly 1,000 of letters from agents who are willing to voluntarily surrender the authority before Singapore Airlines ask us to do so.”

The three-month old impasse is over the commission paid to agents on each ticket. Singapore Airlines had earlier said it will not pay any commission on tickets sold and agents should charge a transaction fee from customers.

The tough stance adopted by Tafi notwithstanding, at least 12 large travel houses told Mint on condition of anonymity that they are willing to stop agitating and start ticketing for the airline. These travel houses include consolidators—agents who buy tickets in bulk from airline firms and sell them through sub-agents.

Also, some members of the Travel Agents’ Association of India (Taai) in Kolkata and Hyderabad have said they will not support the ongoing boycott of the airline.

“Some 35 members of our chapter signed a memorandum on 1 April saying they want to go back to ticketing for Singapore Airlines,” said Mahesh Neralkar, chairman of Taai’s Andhra Pradesh chapter. “We have already given the memorandum to the national committee of Taai and hopefully the Andhra Pradesh chapter of Taai will be doing business again with the airlines soon.”

In West Bengal, a person familiar with the development said agents there have decided to part ways with Taai and Tafi, which are leading the agitation against the airline. Devendra Pareikh, chairman of the West Bengal chapter, was not available for comment

Taai is not taking the splintering well.

“The decision taken by 33 members of Kolkata Taai was totally illegal,” Rajinder Rai, president of Taai, told Mint. “We have summoned the chief of eastern chapter of Taai for such a decision and the management committee is holding an urgent meeting to resolve this. I reiterate that we are continuing the battle against Singapore Airlines.”

“We have already suspended the memberships of three members and will now issue show-cause notices asking for explanation why they are not supporting the association’s agitation,” said Pradeep Lulla, president of Tafi, adding that the associations have decided to take action against errant members.

“The faction in the Kolkata’s Taai chapter and Hyderabad is the signal of criticality of the battle,” said a senior executive from a Mumbai-based travel house who declined being named. He cautioned that agents may lose the fight if they don’t intensify their stir in a united manner, given that more foreign carriers are adopting the zero-commission model.

On Thursday, Rai said that Taai has sought intervention from political parties and the aviation regulator Directorate General of Civil Aviation (DGCA). “We are meeting the representatives of political parties,” he said without divulging a timeline or agenda.

Late in 2008, Singapore Airlines decided to do away with the 5% commission on each ticket; in retaliation, at least half a dozen travel agents’ associations boycotted the carrier. The travel agents maintain that the zero-commission model will not work in India.

Other carriers, both domestic and international, had earlier gone back on their zero commission policy and agreed to a 3% commission on the gross fare.

“Airlines cannot impose many things in India just because that they are doing it in the US,” Prakash of Tafi said.

Lee Lik Hsin, regional vice-president, west Asia and Africa, for Singapore Airlines, admitted that the airline does pay commissions in some countries, including in China. “We are talking to Indian travel agents and transaction fee model is the future,” Hsin said.

Of the 72 international airlines operating in India currently, 16 are currently not paying commissions to agents. While a joint meeting of Taai and Tafi on 2 April was to decide on starting action against some of these airlines, that decision has now been deferred.

“We want to achieve results first in the Singapore Airlines agitation and only then take up some other issue,” Lulla said.