RealTime IT News

Travel Sites Playing Hardball

In what appears to be a tit-for-tat kind of move, online travel agencies Expedia Inc. and Travelocity.com apparently have decided to penalize United Airlines for its recent decision to eliminate per-ticket sales commissions.

Travelocity reportedly added a $10 fee to all United fares and Expedia was said to have put United's routes at the bottom of the page, although a quick check this morning turned up some search results that listed United fares in the ordinary manner.

The nation's airlines, struggling to recover from the travel slump that occurred after the terrorist attack on America last September, have been steadily cutting or halting commissions in order to save money. United, for example, lost $2.1 billion in 2001.

In a game of follow-the-leader, United said late last week that it will no longer pay base commissions for tickets issued by travel agents in the United States and Canada; US Airways also followed suit. American Airlines and America West Airlines both said last week that they would no longer pay base commissions for travel agency tickets issued in the United States.

Delta Air Lines decided to eliminate base commissions paid to travel agents in the United States and Canada on March 15. However, only days later, Expedia signed a marketing deal with Delta.

Delta's move followed similar actions by Continental Airlines and Northwest Airlines last year.

However, many of the other airlines have special deals with the big travel sites. "We have broad marketing agreements with numerous airlines and we receive compensation for our sales and marketing efforts," Travelocity spokesman Al Comeaux told the Associated Press. "Apparently, some airlines don't see the value that we provide to them."

The American Society of Travel Agents (ASTA), representing 24,000 agencies online and off, has called the move to cut commissions "anti-consumer." Airline analysts have estimated that the nation's largest carriers could save as much as $1 billion by not paying commissions.

Prior to deregulation of the airline industry, airlines were required to pay base commissions to travel agents at a rate fixed by the government without regard to efficiencies or sales results achieved by the agencies.