Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 25, 1995 TAG: 9503270051
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: FROM STAFF AND WIRE REPORTS
DATELINE: WASHINGTON LENGTH: Medium
``The question is whether airlines did this collusively or whether they did it independently,'' said Anne K. Bingaman, assistant attorney general for antitrust. She made the comment to Rep. Michael Forbes, R-N.Y., during a House Appropriations subcommittee hearing on her department's budget.
Bingaman didn't say that the Justice Department had opened a formal investigation of the practices, adding she would brief Forbes privately on the matter.
In February, major airlines unveiled a cost-saving measure under which agents would receive $25 on one-way domestic tickets and $50 on round trips, instead of a 10 percent commission per ticket.
Travel agents were stunned, and many protested the move as an attack on their livelihoods.
In Roanoke, World Travel Service president Ted Moomaw on Friday sent a fax to his business customers urging them to write congressmen and senators to complain about the airlines' using their collective power to force travel agents into collecting service charges by cutting their commissions.
About half of Moomaw's sales are for business travel, which tends to have the higher-priced fares affected by the commission cap. The cap has resulted in commission cuts of as much as 1.5 percent, he said.
While that may not sound like much, many travel agencies work on a profit margin of 1 percent of sales or less, Moomaw said. It costs travel agents $25 to $30 to write each airline ticket. Before airlines announced the cap, commissions on more-expensive tickets covered losses on low-price tickets, he said.
Moomaw said World Travel was looking at all available options to deal with the cut in commissions. He said his agency doesn't anticipate setting up service charges for business travel but has not ruled them out.
At the subcommittee hearing, Forbes said the airlines' action ``seems to me to fall within the jurisdiction of antitrust concerns'' that such an activity by major airlines ``could very well put travel agents out of business around the country.''
Bingaman replied, ``We are absolutely on top of this in terms of sharing your concerns.''
After reading press accounts of the commission caps, Bingaman said she discussed the problem with Justice Department staffers who specialize in transportation and worked on a major price-fixing case last year.
``I talked to them at length about it,'' Bingaman said. ``We've had a number of travel agents come in to see us.''
Staff writer Greg Edwards contributed to this story.
by CNB