writer somewhere on the internet writes : I think you are correct in
your assumptions, but wrong in your solutions.
In my opinion,
getting the government involved in this is a bad idea. If the big guys feel that
travel agents are bad for their business, then they have every right not to do
business with them. Do you really believe that companies should be forced to use
a service that they deem bad for their business.
encourage people to contact their representatives, encourage people to contact
their travel agents and use their services. This will help the agents and the
smaller airlines. Travel agencies are optional service agencies. No one,
including airlines, should be forced to do business with them. How can you
possibly suggest that laws be written to force a business to pay for a service
that they don't want or need simply so they can help their competitors get
I like travel
agents. I hate having to buy my tickets myself. I now have to pay my travel
agent a fee for their service. I don't like it, but that doesn't mean the big
guys should be legally forced to use travel agents. I now try to avoid the big
guys whenever possible. This is my punishment to them. If enough people will
punish them the same way, maybe they will change their minds.
Let the market
punish the airlines for their actions, but keep the government out of this type
David replies :
I agree with most of what you say, and I have never said that airlines should be
forced to pay commissions to travel agencies.
However, I do
advocate an even handed approach to air travel. The best solution is not
for more government interference, but less - I'd like to see the government
remove the exemption from anti-trust laws which the airlines currently benefit
from. At present it is legal for the airlines to jointly agree on fares (ie
price fixing) but it is illegal for the travel agencies to try and jointly
respond to airline actions. There's no fairness in that, is there!
economists agree that while the government should not micro-manage the economy,
'natural monopolies' need some level of governmental control. The airlines
have become natural monopolies because they have made it impossible for other
new airlines to become established and compete with them. I do believe
that governmental control is necessary to force the airlines to stop
'misbehaving' and to start to act fairly in the face of competition.
Bruce from VTS
Travel Direct in DC writes
: The airlines seem to have lost their way and I personally feel that is
a result of forgetting about customer service and focusing instead on
stockholder service. Sure investors deserve to make money on their investments -
but that will happen when a company sticks to its core business, focuses on
value and service to its customers and rewards those who work for and with it in
a reasonably manner. If following that formula is impossible then it is time to
fold the tent, sell the airplanes and get into another line of work.
The cost of
distribution that the airlines need to contain is the Segment Fee cost as
pointed out by a previous writer. In addition, all airline tickets should carry
a penalty equivalent to the basic costs of distribution [segment fees, agent
compensation, etc] for there is no reason why the airline or the travel agent
should bear the entire cost of a traveler changing his mind. Restocking charges
apply in many industries and would be appropriate here.
Airlines need to
price their product correctly and eliminate the onerous rules which do not allow
a consumer to buy a ticket and use it as he sees fit. For example, tickets
purchased within the rules of purchase and used exactly as issued constitute an
"offense" in the eyes of the airline if they turn out to be 'back to back'
That the airline
can control what a passenger does while away from home on a non-refundable
ticket is completely without reason. Should that passenger choose to return home
on a separate ticket that is his business and no one else's. Of course, with
their frequent flyer programs the airlines make it easy to catch such "criminal"
behavior. Woe unto the travel agency who happens to have issued such a ticket,
even if the client requested them in two separate contacts, for that agency will
be slapped with a bill for the full fare as the airline deems appropriate!
Back to backs,
hidden cities and other such airline no-no's would go away with correctly priced
product. I cite Southwest Airlines as an example of an airline that clearly
knows and understands how to price their product and how to develop and enforce
rules of ticketing and use. If Southwest can do it and not only survive these
troubled times, but make money the others can too. By the way, Southwest
continues to have the full support of the travel agency community because they
continue to compensate us.
Katie from Texas
writes : Very interesting and possibly correct hypothesis. You have
good ammunition….but what about the success of Southwest which uses no travel
David replies :
Southwest does indeed work with travel agents, and, if I am not mistaken, is
possibly the only airline that still pays a full uncapped 10% commission to
However, I have
never said that travel agents are essential to the success of an airline. The
major airlines are correct in their thinking - they don't need travel agents,
and indeed, travel agents harm them by reducing the fares that they would
otherwise sell and reducing their client loyalty.
Travel agents are
essential to travelers, and to small airlines, but not to the major airlines!
What do you think?.
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Copyright 2002 by David M