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.

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