The airline-agent relationship has touched a new low with the Travel Agents Association of India - Northern Region (TAAI - NR) picking up the cudgels on behalf of IATA agents against Lufthansa and Austrian Airlines. The association members boycotted the airlines for three days from July 27-29, 2003, as a token protest.

"The aim is to provide all agents a level playing field by preventing airlines from pursuing unfair marketing policies. We have the support of the TAAI management committee. If the issue is not resolved soon, there will be an all India movement," says Rajji Rai, president of the TAAI (NR).

Agents of the region have long been fretting and fuming over the special benefits being awarded to consolidators, who force them to do business through preferred agents. Airlines like Austrian and Lufthansa are accused of offering consolidators high PLB (Productivity Linked Bonus), unlimited seat blocks and waivers on debit note.

The real problem, say agents, lies in the price difference and block seat allocations. The top few get special nett prices, which are 10-12 per cent cheaper than what other agents get. So, middle-level agents, despite having ticket stocks, are being forced to do business through consolidators because it is profitable.

Anil Kalsi, MD, Ambe Travels explains, "Consolidators sell a ticket priced at Rs 34,000 for Rs 25,000, which makes it obvious that they get it at a price even lesser than that. Naturally, smaller and mid-size agents rush to consolidators as it helps to retain a client and make some profit. But our main problem is even if we want to sell a ticket at Rs 34,000, we cannot do so due to non-availability of seats on the system. A flight on the CRS system shows zero. So, a situation has been created wherein agents have to buy tickets through consolidators."

The boycott is not a sudden action. Rai had earlier issued a notice on July 4 to IATA members instructing them to stop buying tickets from consolidators with immediate effect and wrote letters to airlines requesting them to solve the PLB and seat block issue through discussion. While Lufthansa wrote Harald Hahn, their GM, is on vacation, Austrian country manager, Bernhard Baeck refuted the charges replying, "There is need to educate your members to learn to change according to times. Airlines do business with various segments of the travel industry differently in the same way as your member agents would with their own clients with different productivity levels. There is even far greater need to discipline your members who run to other agents for minimal margins of profits but blame airlines for their going extinct."

Reacting to the statement, Rai notes, "It is a mandate. IATA members will not buy tickets from consolidators. The 10 per cent difference on PLB allows consolidators to pass on a percentage of that bonus to customers, thus undercutting other agents. So, the system is indirectly forcing approved IATA agents to buy tickets from consolidators and lose their identity."

Interestingly, Balbir Mayal, one of the major consolidators and vice-president, TAAI supports the cause. "I have been advocating the lowering of PLB margin for a long time. A three per cent difference between the lowest level and highest level of PLBs will discourage consolidators to pass on the benefit to clients. However, agents must be determined not to buy tickets from consolidators even when the difference comes down to three per cent."

One thing is certain. In case of an all-India boycott British Airways, Air-India, Emirates, Swiss and KLM stand to gain. For instance, Air-India (A-I) is flying to Frankfurt and has a code-share with Austrian as well. So, agents will sell Vienna tickets out of A-I quota. However, since flights are choc-a-bloc in August due to movement of students movement, the airlines will feel the pinch in real terms only in September. What's more, if 90 per cent agents won't buy tickets from the top few, the airlines' will suffer as consolidators get a major chunk of their business from smaller agents.

Such a step, no doubt, is expected to put a spanner in consolidators' effort to take over the whole market. What remains to be seen is whether agents buckle under financial pressure, or airlines show the white flag.