Calcutta High Court issues status quo order on agency commission cuts till November 5, 2008

In 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 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.