Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 14, 1995 TAG: 9502150035
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: LENGTH: Medium
USAir and United moved Monday to limit travel agent commissions, matching plans announced last week by their rivals and virtually eliminating agents' hopes of stalling the move.
The two airlines joined American, Delta and Northwest in imposing a maximum commission of $50 on round-trip domestic tickets and $25 on one-way domestic tickets. Together, the carriers - the nation's five biggest - control 80 percent of the domestic airline travel market.
For years, travel agents had collected 10 percent fees on most domestic tickets in exchange for offering a convenient ticket distribution system. The airlines are ending the practice as they struggle to become profitable after losing $13 billion in five years.
Delta's cap took effect Monday and United's will take effect Wednesday. American, Northwest and USAir impose theirs Feb. 27.
Many agents complained bitterly Monday. Some expect to impose fees of $20 to $40 for bookings, some pledged to hold the line, and some said they could shut down.
``It's a rotten thing to do,'' said agent Toni Piacente of Harbor Beach Travel in Fort Lauderdale, Fla. ``It makes us want to boycott all the airlines, but of course you can't do that.''
Most agents said they would try to shift their focus from pushing airline tickets to selling products that retain 10 percent commissions, including vacation packages, international flights and cruises.
Cliff Pettit, owner of Cliff Pettit Travel Service in Fort Lauderdale, Fla., said he will become more of a travel adviser.
``I don't think the travel agency community as we know it will be here in three or four years,'' Pettit said. ``We will have to set ourselves up as consultants, offering alternate ways of doing things and negotiating the best possible fares for our clients.''
The board of the American Society of Travel Agents plans to meet this weekend to discuss alternatives. Options include a lawsuit against the airlines and a media blitz to tell the public the caps' possible effects - including agency fees, said spokeswoman Nancy Gravatt.
Airline tickets generally account for more than half of the revenues at most agencies. And while the caps affect only about 15 percent of all the tickets sold, those are the tickets that provided the lion's share of profits at many agencies.
One of the few immediate beneficiaries Monday was the cruise industry. Lehman Brothers cruise analyst Sheri Spear said the industry probably will gain bookings as agents look more closely at cruises. And Carnival Cruise Lines announced it would pay 12 percent commissions to agencies that begin selling its cruises.
by CNB