Fair Trade Commission recommends corrective action to IATA… Will ‘Zerocom’ end? – Travel News


The former president of KATA sows, the current president reaps
Expected to revive lost commissions if accepted by IATA
Possibility of objection, interest in future development

As the Fair Trade Commission judged that it would violate the Terms and Conditions Act for airlines to unilaterally decide on ticket issuance fees paid to travel agencies, it became a matter of concern how the travel industry will respond in the future. Related article: The Fair Trade Commission “Correct” the airline’s unilateral zero-com

The Fair Trade Commission made this decision on the 20th and recommended the International Air Transport Association (IATA) to rectify the unfair terms and conditions of the Passenger Sales Agency Agreement (PSAA). This action was taken three years after the Korea Travel Association (KATA) filed a request for unfair terms and conditions review with the Fair Trade Commission in October 2018. Considering the period of entrusting research services to academia and legal circles and holding public hearings prior to requesting an official review, it is a result of much more time invested. As a result, in the tug of war between airlines and travel agencies over ticketing fees, which began in earnest with the abolition of Korean Air’s ticket issuance fee (Zerocom) on January 1, 2010, the travel agency won. It is also being positively evaluated in that it is the result of the travel industry’s persistent response without giving up. It can be said that the seeds sown by former KATA president Yang Moo-seung were sown by current chairman Oh Chang-hee and bear fruit.

The focus is on the future developments. It is unclear from now whether IATA will accept the FTC’s enforcement recommendation. There is a high probability that it will not be followed. If we accept the ruling as it is, significant changes in the commission policies of domestic airlines for travel agencies are inevitable, as well as affecting other foreign countries that are in conflict over the abolition of commissions. The travel industry is expected to respond while observing whether IATA is accepted. As the zero-com system that destroyed the revenue base of travel agencies was made based on unfair provisions that violate the Terms and Conditions Act, it is expected to request improvement. In some cases, you can claim retroactive compensation for past damages caused by Zerocom. At the time of the request for review in 2018, former KATA Chairman Yang Moo-seung said that he was considering a step-by-step approach in this way. If retroactive application is unreasonable, it is highly likely to focus on reviving or raising sales commissions, which are currently at zero or low.

After the decision was made, KATA also emphasized again that “travel agencies are in an unfair situation where they provide free service without receiving payment for various ticketing labor for airlines.” Oh Chang-hee, Chairman of KATA, said, “This recommendation is meaningful in that it has provided a foundation for a fair, sound, and win-win transaction between airlines and travel agencies. We will do our best to establish a sound transaction.”

By Kim Seon-joo, staff reporter [email protected]

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