ASSOCIATIONS : Penalised by CCI and Threatened by FIA

Default, Letters — By on February 25, 2012 at 2:10 pm

By- Saldanha .S National Treasurer

IAAI It is well known that in the heat and dust of struggle for survival of small and medium travel agents, their Associations had tired all possible legal means to ensure that their only means of livelihood – commission on sale of tickets – is not snatched away by their own principals. There were protests, representations, and questions in the parliament and even court cases. On the sidelines, TAFI had suspended two of their member M/s FCM Travel Solutions (India) Ltd and Uniglobe, who reportedly went to the Court and later complained to the Competition Commission of India (CCI) and filed a case, against TAFI. While the matter was simple ie TAFI memberships of FCM & Uniglobe, paradoxically it was escalated into a issue of cartelization by the Associations against the Airlines and TAAI & IAAI were also sucked into these swirling waters. Even though, the Associations seem to have put up a reasonable defense, the CCI in its wisdom passed an order dated on 04/10/2011, imposing a fine of Rs.1.0lac on each of the Associations and a s k e d t h em t o g i v e a n undertaking that they would not “ …indulging in such anticompetitive conduct in future …”

While TAFI Reportedly paid the fine, TAAI and IAAI have been issued a show cause notice for non compliance asking them why a fine of Rs.1.0 Lac per day extending up to a maximum of Rs.10.0 Crores should not be imposed on them. It is reliably learnt that IAAI & TAAI has filed appeals before the Hon’ble Competition Appellate Tribunal.

FIA seized on the opportunity and lost no time in advising each of the Associations and its Presidents “ N O T T O T A K E A N Y ADVERSORIAL POSITION OR TAKE ANY ADVERSE ACTION” against its member airlines. What is  more, FIA even warned that it “ will not hesitate to take necessary action including legal recourse to protect the member airlines a n d / o r e x c l u d e s u c h agency/agencies from selling member airlines’ tickets”. One wonders how the tables are turned ! Can there be a more strained relationship between a principal and agent? Can one accept a situation, where the vendor bypasses the agent and sells the goods at a lower rate than he supplies to the agent, advising him that he should add “transaction fee” for his services and sell ? Strange logic indeed!! It is a matter of great concern that some important aspects are lost sight of. For instance:

a) Historic Order of DGCA dtd 05/03/2010, mandating commission as a legitimate right of Travel Agents vide Aircraft Act of 1934 and Aircraft Rules of 1937

b) Order of Hon’ble High Court of Kerala directing the DGCA to implement its own order dtd 05/03/2010

c) P e n d i n g Wr i t o f Certiorari before the Hon’ble High Court of Kerala, seeking call back and quash the revised DGCA Order dated 28/07/2011 and writ of Mandamus to implement the order of 5th March, 2010

The situation is grim indeed. All stake holders in the Aviation Industry need to do a sincere soul search and find out how on earth land into this miserable condition. Were the Regulators and Law e n f o r c i n g A u t h o r i t i e s overburdened that they did not pay attention to the downward slide in the Aviation Industry ? It is time that we took hard decisions and stop pointing fingers and running for cover. We can and must face the situation squarely and seek a solution sincerely and unitedly.

Salvadore Saldanha

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