Web trip discounts rile agents

Threat: Airlines are trying to destroy us with low Internet fres, say travel agencies.

August 09, 1999|By EDWIN MCDOWELL | EDWIN MCDOWELL,NEW YORK TIMES NEWS SERVICE

Travel agents reacted with anger and disappointment to the latest airline offers of additional discounts on tickets booked over the carriers' World Wide Web sites.

"No matter how the airlines dance around it, this is an attempt to put travel agents out of business," John Hawks, president of the Association of Retail Travel Agents in Lexington, Ky., said of last week's latest round of discount offers. Hawks added that he expects Congress to take a critical look at Internet-only fare offers when it returns to the topic of airline passenger rights, possibly this year.

The American Society of Travel Agents in Alexandria, Va., also opposes Internet-only fares. "All fares should be available to all travelers," said Dina Long, a spokeswoman for the association.

Airlines say they are doing what every business tries to do -- lower costs.

"We're not trying to put anybody out of business," said Dave Swierenga, economist for the Air Transport Association, the industry trade group. "But now we have a new technology that bypasses a big part of the labor component of writing tickets, and obviously that's hard for agents to deal with. This is simply a rational business decision in a world that's changing, and travel agents need to recognize that the ticket-writing function can now be done more simply by technology."

That new technology is the Internet, which allows passengers to buy tickets directly, without having to go through travel agents or reservations agents. Travel agents, who book about 80 percent of airline tickets, can match fares loaded into the computerized reservations systems as well as most fares posted on an airline's Web site, but low fares for last-minute weekend travel are usually made available only to an airline's e-mail subscribers, while other bargain fares are increasingly found only on the Web sites of airlines.

Airlines offer low Internet-only fares to persuade more passengers to book electronically and save the carriers money.

"It costs Delta up to 400 percent more to book and deliver a ticket using the traditional processes," Vince Caminiti, a Delta executive, said in a speech to a business travel association in Minneapolis last month.

The airline industry's ticket commission costs fell to $5.2 billion in 1998 from a high of $7.6 billion in 1993, mainly because in 1995 the carriers succeeded in scrapping the traditional 10 percent agent's commission and imposing a maximum $50 fee for each transaction. Overall, commission rates fell to 6.3 percent in June from 10 percent in June 1994.

To help pick up the slack, travel agents have increased their sales of cruises and land excursions, package tours and hotel rooms.

Many charge customers a fee for such once-free services as rewriting tickets and planning itineraries.

Last week, Northwest Airlines reduced leisure fares by as much as 25 percent for travel between next month and December. Most other airlines quickly matched Northwest, including Delta Air Lines. Then, Delta offered an additional 10 percent off the sale fares for passengers who book their tickets on the Delta Web site. Other airlines matched those reductions. Unlike Delta's unsuccessful attempt in January to charge $2 for each round-trip flight not booked on its Internet site, last week's Internet moves appear likely to succeed. At least for now.

"The airlines are very brave at doing such things when we're in a robust economy," Hawks said. "But if there's any business that's cyclical, it's airlines, and when the downturn comes, as it will, travel agents will remember how they were treated."

Pub Date: 08/09/99

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