Thursday, November 15, 2001

Airline industry courting travel agents

Airlines reconsidering snub of agents

By James Pilcher
The Cincinnati Enquirer

        After years of a relationship that could be termed strained at best, airlines could be taking some tentative steps toward joining forces with travel agents to help save themselves following the Sept. 11 attacks.

        A few airlines, most notably Continental and Northwest, have made direct overtures toward the nation's 26,000 travel agents, which account for 80 percent of all the airline tickets sold, according to the American Society for Travel Agents.

        Gordon Bethune, chairman and chief executive officer of Houston-based Continental, recently was the only airline executive to attend the ASTA conference in New York, and the airline has increased some commission rates for group bookings.

        Northwest has extended an offer to agents to travel for 10 percent of a ticket's full value.

        And even local stalwart Delta Air Lines, which operates its second-largest hub at the Cincinnati/Northern Kentucky International Airport, has offered to send travel agents to Orlando, Fla., to visit Disney World for 10 percent of full value.

        Yet after years of seeing their commissions cut and capped, many local travel agents are skeptical about seeing some of that money restored and see these recent attempts as minor.

        “As far as I'm concerned, they're still steering people to online outlets,” said Brenda Banks, owner of Four Seasons Travel in Wyoming. She said her business is off by 45 percent compared with the same time last year, all as a result of the events of Sept. 11 and its drastic effects on the travel industry.

        “I got out of the individual airline ticket business two years ago because it just wasn't worth it, and I don't see that changing.”

        The entire relationship between travel agents and airlines also has changed drastically in the past five years with the advent of online travel.

        Airlines, seeking to cut distribution costs, aggressively pushed customers to Web sites, while cutting commissions for agents. And agents say that has to change, otherwise the airlines could be missing out on an opportunity to rebuild traffic and revenues.

        “They need help, because they're in big trouble,” ASTA President Richard Copland said. “And while the ice is thawing a little bit, there is still a lot of arrogance out there.”

        According to local travel agents, Delta's rate is 5 percent, or a maximum of $20 a round-trip ticket, a rate consistent with the rest of the industry.

        Agents are also able to book Delta flights online for clients but do not get commissions on special Internet fares.

        Delta spokeswoman Cindi Kurczewski would not comment on commissions directly but said travel agents remain an important market for the Atlanta-based airline.

        “They also remain an important choice for the customer ... but after September 11, all the airlines are looking at cost issues,” Ms. Kurczewski said.

        She said ticket distribution is the third-highest cost at the airline behind labor and fuel. “And how we maintain our relationships with agents will also be developing in this industry — that is continually changing.”

        One such change already was in place before the attacks. Most agents already had begun implementing service charges payable by the client to supplant or replace shrinking commissions.

        “It's the only way to survive,” said Michael Geraci, owner of the Carlson Wagonlit branch in Wyoming, who said he's barely making enough to meet payroll and his rent following the attacks.

        Other sectors of the travel industry have been actively courting the agents, with some portions of the Ramada hotel chain this month boosting commissions from 10 percent to 15 percent for stays between Nov. 15 and Jan. 31.

        Still, it's airlines that fuel the travel industry, and the relationship with agents could take a while to thaw.

        “We're seeing a willingness to have discussion and dialogue among the second-tier carriers, and maybe that will carry over (to) the big three of United, Delta and American,” Mr. Copland said. “I see a light at the end of the tunnel, and I don't think it's another train.”


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