Travel agent commission, Calcutta High Court issues status quo order

Krupa Vora of TravelBizMonitor reports, of a significant development, which has national implications. Travel agents will continue to receive commissions on the sale of airline tickets till the Calcutta High Court passes judgement in the suit filed by a TAFI member agent in Kolkata.

The TAFI member agent (plaintiff) filed a suit in Calcutta High Court early last week against National Aviation Company of India Limited (NACIL), International Air Transport Association (IATA) against the abolition of agency commission on the grounds that the IATA Passenger Agency Sales Agreement does not permit an airline to reduce agency commission to zero per cent.

The zero commission regime was to due to be implemented from November 1, 2008.

The High Court, according to industry sources, in its first hearing of the suit (case number: G.A. 3257/2008 and C.S. 197/2008) had passed an order to maintain status quo stating, “Having heard and considered the facts and circumstances of the case, the reduction of remuneration to zero per cent cannot be justified as the term 'Service rendered' postulates payment for work done. Zero per cent contemplates services rendered for free and the rules of IATA do not postulate such a situation. Neither the rules have been amended nor has the agreement been terminated. Therefore, there is no justification for reduction of the commission to zero per cent. Parties are directed to maintain status quo as on date till 30th September 2008.”

At the hearing of the suit yesterday, where according to sources, the airline representatives did not show up, the High Court directed the parties to maintain a status quo till the next hearing.

The date for the next hearing, according to sources is November 5, 2008.

As the plaintiff in his petition had also advised the court that this was a matter affecting numerous IATA agents across the country, the Hon'ble Court, according to sources has, therefore, given leave to all agents interested in the matter to become a party to the suit by making an application to the Court. A newspaper advertisement to this effect will be published shortly in two major dailies. According to sources, in order to become party to the suit an agent will be required to submit an affidavit, stating the same, along with a copy of his/her Agreement signed with IATA.