Top left: Maxine Weinberg:
Travel agents provide many
free services.
Travel agents
are ready to
do battle with
airlines over
`! the ticket-
commission cap.
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40
STEVE STEIN STAFF WRITER
he skies aren't very friendly these days.
Since last month, when seven major U.S.
airlines capped the amount of commission
they pay to the country's more than 350,000
travel agents, the two have been at odds.
Antitrust lawsuits have been filed
against the airlines by the American Soci-
ety of Travel Agents (ASTA) and the As-
sociation of Retail Travel Agents (ARTA).
ASTA president Jeanne Epping, whose
organization boasts more than 25,000
members in 135 countries, has met with
U.S. Senate Majority Leader Robert Dole
(R-Kansas) and House Speaker Newt Gin-
grich (R-Georgia).
Sen. Dole and Sen. Strom Thurmond (R-
South Carolina), chairman of the Senate
Judiciary Committee, have asked the An-
titrust Division of the Justice Department
to investigate the commission cap.
ASTA predicts the cap will put 10,000
travel agencies in the country out of busi-
ness, sending 40,000 people to the unem-
ployment lines.
In addition to the lawsuits, travel agen-
cies have launched a nationwide publicity
campaign because they feel the airlines are
blaming them in part for the airlines' fi-
nancial woes and attempting to force the
agencies to charge service fees for tickets.
The airlines, which instituted the cap,
tossed out their 10 percent across-the-board
rate for domestic tickets which has been in
effect since the early 1970s and are limit-
ing commissions to $50 for a round-trip
ticket and $25 for a one-way ticket.
Travel agents say it costs them an av-
erage of $30 to issue and process airlines
tickets. Agencies can earn as low as 40 per-
cent and as much as 90 percent of their rev-
enue from airline ticket sales.
In Detroit, where many travel agencies
are Jewish-owned, agents are not hesitat-
ing to speak out about the situation. Among
continue to ensure such returns.
'We also believe that the trend
in the industry toward fees on
Bottom left David Ashman:
some transactions will contribute
Commissions are not an
to recouping costs.
operating expense for
David Fishman, president of
airlines.
Cadillac Travel in Southfield,
claims commissions are not an op-
them is Maxine Weinberg, president of erating expense for airlines, but an "ex-
Travel Max in Farmington Hills and a pense of sales."
If commissions do account for 11 percent
member of the newly formed Coalition of
of Northwest's domestic operating ex-
Concerned Travel Agents of Michigan.
"Travel agents have never charged air- penses, Mr. Fishman says, "that's only a 1
line passengers for services rendered, and percent increase in the last 20-25 years. A
we do not want to charge now," Ms. Wein- lot of businesses would kill for that."
Ms. Epping of ASTA said that during
berg said.
"We are not an expense to the airlines. 1994, U.S. travel agency sales of airline
We are only paid when we sell a seat and tickets totaled $57.7 billion, a 3 percent in-
in the past, 90 cents of every dollar went crease from 1993. Yet agents processed 11
percent more travel documents in 1994
to them.
`The airlines say they've been paying us than in 1993.
"Travel agents are doing more work sell-
too much. Ten percent? What other busi-
ness in the world operates on a 10 percent ing airline tickets for less money," she said.
"Total commissions for 1994 from the air-
gross commission?
'We feel the public needs to know exactly lines amounted to less than $6.3 billion.
what services they have been receiving for That means the average agency received
free from their local travel agents: car $190,000 for airline ticket sales, or about
rentals, hotel reservations, airline seat and 60 percent of its revenue."
meal assignments, frequent flier records
and information, profiles of frequent
travelers, rewriting tickets, calling
clients when 'fare wars' occur, filing
for lost tickets and keeping track of
refunds, booking competitive air-
lines, and so on."
Barry Kotar, senior vice president
and general sales manager for
Here is the domestic ticket-commission status
Northwest Airlines, responds: "Our
among major U.S. airlines:
commission expenses have grown
faster than our revenues over the
. 10 percent.
Alaska_ , , .
last six years. Commissions cur-
Capped,
American
rently account for 11 percent of our
America West , .. . 10 percent.
domestic operating expenses and to-
Capped.
Continental ,
tal more than $530 million per year.
Capped.
Delta
"It's essential that we bring these
Capped.
Northwest ..
costs down, just as we have worked
10 percent.
Southwest
hard to reduce costs in other areas
, Capped.
TWA . .
of our business.
Capped.
United
"We value the hard work of trav-
Capped.
USAir
el agencies. They deserve to earn a
satisfactory return for that work.
We believe this (cap) program will
❑
Who's Doing
The Capping