Air India Bans Agents From Selling Canada Tickets Over Gouging

“Poppycock, a sham, baffling, irrational” — Indian agents reserved the choicest adjectives to describe Air India’s move that bans them from booking tickets for Canada.

The airline has resorted to this measure to penalize agents selling tickets to harried passengers at three to four times the original fare, according to reports in the Indian media,

However, with India having opened its skies for international scheduled flight operations from Sunday, local agents feel the airline has smartly bypassed them to sell directly to the consumers. Demand for flights between the two countries is very high and Air India is one of only two airlines with a direct Canada connection from India, Air Canada being the other.

Besides its large Indian diaspora, Canada is home to thousands of Indian students. As per the Canadian Bureau for International Education, the highest percentage (34 percent) of inbound students coming into Canada was from India in 2020. The number of Indian students visiting Canada has almost doubled between 2017 and 2019, to 219,000.

New Owners, New Rules?

Air India, a government-run airline, was handed over to the Tatas in January after they won a bid to acquire the airline. Some reports have also stated that this move against agents is a definite reminder of the rich legacy of fair, ethical and transparent practices woven into the corporate ethics of Air India’s new owners.

The agents, however, beg to differ.

In today’s digital age, every ticket issued is done so after directly accessing the airline’s inventory and after the airline approves it, said Ajay Prakash, president of Travel Agents’ Federation of India (TAFI). “I fail to understand from where this whole story of agents blocking tickets and then selling them at four times the price is originating. Anyone working with an airline reservation system would know this can be traced.”

Air India remained unavailable for comment and has not responded to Skift’s queries on the ban.

Fare Gouging Is Real, But How About Tracking Perpetrators?

Fare gouging was a reality last year when travelers had to shell out ridiculously high fares to fly out of India.

While Prakash admitted to the escalation of fares last year, he also noted that the airline could easily track the erring agents. “There is a record of where the booking originated down to the IP address of the computer used to sell the ticket. Why this knee-jerk reaction now?”

Echoing Prakash’s sentiment, Pradip Lulla, chairman and managing director of Cupid Travels, hinted at the free hand that airlines have in the scheme of things. “Carriers have the inventory in their hands, control the PNR and introduce refund policies. They also decide the fares. India’s directorate general of Civil Aviation only provides a fare range. So, with all this access, even if someone manages any wrongdoing, airlines can easily figure out who.”

Keeping Agents Out of The Equation?

Agents dubbed this move of cutting off the entire segment of Indian travel agents counterproductive, especially when the inventory is open to overseas agents and online travel agencies registered overseas. Travel trade representatives say the airline could have instead blocked the agents misusing the system.

Many feel this is also a smart move to keep agents out of the equation considering the demand that’s coming out of the sector, especially when India has resumed scheduled international flight operations, after a gap of two years. Demand is expected to peak during the summer season.

“Maybe they do not want this most-selling sector to go to the travel agents and even lose the GDS (global distribution system) money. When it was a government entity, we could understand why things were a certain way. But now, with none other than the Tatas taking over, we expect things to change,” said Jyoti Mayal, president of Travel Agents’ Association of India.

Air India vs. Agents — An Old Story

The agents vs. Air India tussle isn’t new. In 2020, agents had moved India’s highest court, the Supreme Court, seeking a uniform refund policy for airline bookings canceled during the lockdown. “Why were agents in India not receiving their refunds when refunds were being given for Air India tickets issued in U.S.? Isn’t this discriminatory?” questioned Lulla. “The airline got away at that time as it was a government entity with cash flow problems. And then they had the support of the authorities.”

However, agents argued that this ban could not be sustained for long. “We cheered when the Tatas took over Air India, expecting some rationality towards reviving the airline. However, it seems they are blinding themselves to the reality that 80 percent of tickets sold in this country are through travel agents,” TAFI’s Prakash said.

Agents in some parts of India are planning to stage protests and demonstrations against the airline’s move.

The fact that this move negating the agency of one of the pillars of the travel industry did not fly with agents is no surprise. Is there a resolution in sight?