After agitating pilots, Air India might have to face the wrath of travel agents. Air India and Jet Airways are set to cut travel agents? commission from the existing 3% to 1%, effective July 16, to save costs.

The Travel Agents Association of India (TAAI) has written to Air India to defer the move till October end. TAAI also says that it might not promote tickets of the two airlines, resulting in higher losses for the two carriers.

In its letter to TAAI, Air India’s executive director (commercial) FJ Vaz wrote that with skyrocketing fuel prices and input costs going up, it has become inevitable to review remuneration to travel agents. Therefore, it will reduce the agency commission from 3% on basic fare and fuel surcharge to 1%. In turn, TAAI has urged Air India to defer the move. ?With the current situation of Air India where flight schedules are disrupted due to the ongoing strike of the pilots, this reduction would discourage agents from promoting the national carrier, which would lead to further losses. The credibility of the services and the schedules has raised many queries and unpleasant reaction from the passengers at large across the globe,? Iqbal Mulla, president, TAAI, said in his written reply to the national carrier.

The Indian Association of Tour Operators (IATO), another industry body that represents tour operators, too, will soon hold talks with the two carriers. ?In a scenario where already so many taxes are making travel expensive, especially for inbound tourists, slashing the commission is not the solution. We will be forced to charge service or transaction fee if the commission is reduced to 1%, which will further make travel on these carriers expensive for the passenger,? said Sarabjit Singh, senior VP, IATO.

Around 16 airlines, which include British Airways, Lufthansa Airlines, Air Canada, Swiss International Airlines and Singapore Airlines (SIA), don’t pay commission to airlines after moving to zero-commission regime in 2008.

Many travel agents then boycotted these airlines. However, former TAAI president and tour operator, Rajji Rai, points out that travel agents can’t do much even if the two home-bred carriers move to 1% commission as a collective ‘boycott’ might bring them under the lens of the Competition Commission of India (CCI), which can slap a fine for not selling tickets, misusing their dominant market position.

In October last year, CCI had imposed a fine of R1 lakh each on three travel associations ? Travel Agents Federation of India (TAFI), TAAI and IATA Agents Association of India (IAAI) ? for violating various provisions of the Competition Act.

The case was regarding a complaint by Uniglobe Mod Travels in October 2009, following a dispute between travel agents and some airlines, like SIA and Lufthansa, over payment of commission. For carriers not paying commission, and for low-cost carriers, tour operators charge a transaction fee from passengers.