Travel agents protest drop in rates paid by airline companies

Posted: Friday, August 31, 2001

PETERSBURG Travel agents in Alaska and elsewhere were asked to close their doors for two hours Thursday in reaction to cuts in commissions paid by some major airlines.

Commissions paid to travel agents on domestic trips costing more than $400 dropped from $50 to $20 and on one-way trips from $25 to $10, according to the American Society of Travel Agents.

David Berg, owner of Viking Travel in Petersburg, said he closed his doors at 9 a.m. Thursday as part of the protest. He said the cuts come on top of a 50 percent reduction in commissions made in the late 1990s. Viking Travel relies on airline commissions for up to half of its income, he said.

"The purpose of this action is to raise awareness of the airlines' attempt to deprive consumers of their preferred method of purchasing air transportation and their only source of neutral price and service options," Berg said in a press statement.

Connie McKenzie, director of sales and marketing for Goldbelt Family Travel in Juneau, said her agency did not close Thursday. Uniglobe Travel in Juneau also did not close, and agent Jody Schwantes said she was not aware of the protest until Thursday night. But she said the cuts are serious.

"It affects us quite a bit," she said. "It's scary for the industry."

The American Society of Travel Agents said the 60 percent cut in commissions paid by American, Northwest, United, Trans World, Delta and other carriers is intended to drive agents out of business.

Alaska Airlines has not decided whether to cut commissions paid to travel agents, spokesman Jack Walsh said Thursday.

McKenzie said the cuts are part of a trend, but she doesn't think airlines are deliberately trying to drive agents out of business.

"I don't think they've targeted travel agents. It's just a shift in the way consumers purchase," she said.

McKenzie said airlines, like any business, are trying to distribute their product at the lowest possible cost. People have become comfortable using the Internet to book airline tickets, rental cars and hotels, and it has changed the nature of the business. McKenzie said her agency is still busy.

She said to adapt, agents are working to sell products that offer higher commissions such as vacation and business travel packages. Alaska package tours for outofstate visitors are another area that offers higher commissions. All require much more time.

"We've gone from taking orders (for tickets) to really working with people, doing research to present different possibilities to people," McKenzie said.

The cuts could mean up to $500 million in additional revenues for the airline industry, which is already on track to lose $2 billion for the year because of deteriorating revenues, according to Merrill Lynch analysts.


Empire reporter Riley Woodford contributed to this article.

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