American, Delta, Northwest and United airlines agreed yesterday to a $72 million settlement just as jury selection in the class-action antitrust lawsuit was about to begin in U.S. District Court in Minneapolis.
The settlement does not require the airlines to lift the commission caps, a Northwest spokesman said.
"We are pleased with the result," said Sam Heins, the lead attorney for the travel agents. "We think it's a good settlement and look forward to presenting it in court for the judge's approval."
The carriers denied all claims in the antitrust lawsuit but decided to settle to avoid risks and expenses of further litigation. U.S. District Judge James Rosenbaum will hold a hearing on the settlement tomorrow.
"The airlines won, clearly. The caps are still there. They've been very, very good at winning in these types of situations," said Terry Trippler, editor and publisher of Airfare Report, a newsletter.
Earlier yesterday Continental and USAir separately announced they had agreed to pay to settle. TWA settled shortly after the antitrust law suit was filed last year on behalf of about 33,000 agents.
The total amount of the settlements is slightly more than $86 million in cash, according to Heins. Details of how the money would be distributed weren't disclosed pending tomorrow's hearing.
The suit was filed after the airlines capped commissions at $50 for any domestic ticket exceeding $500. Agents typically had received 10 percent of the ticket price.
The Hawaii chapter of the American Society of Travel Agents said the cap was particularly irksome to Hawaii agents since travelers from the isles to points beyond the West Coast normally would be paying more than $500, the point where commission tops out.
Rachel Shimamoto, local ASTA president, has said that a number of travel agents in Hawaii gave up the business after the commission cap was put in place. She has said that agents offer many more services than the airlines, including rewriting itineraries and issuing new tickets without charge, and deserve a fair return.
The lawsuit accused the airlines of conspiring to set commissions at artificially low levels, then announcing the limits at different times to give the impression that they were acting independently.
Airline officials have said commissions are their third-largest operating expense, and they said the limit was a necessary cost-cutting measure.
The agents were seeking compensation for lost commissions and an order prohibiting the airlines from acting in concert on commissions.