United cuts travel
Staff & wire reports
agents’ commissionsUnited Airlines today cut travel agents' commissions to 8 percent, from 10 percent, sparking an angry reaction from agents. United, a unit of UAL Corp., said it needs to cut costs and remain competitive and the commissions trim will save it about $80 million to $100 million a year.
Hawaii travel agents said they were already struggling to make a living under the cap on commissions that airlines instituted in 1995. That cap limited travel agents to receiving 10 percent of the cost of a domestic ticket up to a maximum of a $50 commission.
International tickets also had a 10 percent cap but did not have the $50 maximum limit.
Under the new plan, the $50 maximum commission remains for domestic tickets but still does not apply for international tickets.
Travel agents said they fear United's 8 percent cap on domestic and international tickets will be matched by other airlines.
"It's so discouraging. They just chop away at what they give us," said HNL Travel Associates' Mary Lou Lewis, the new president of the Hawaii chapter of the American Society of Travel Agents.
A $500 United ticket at the new commission rate will earn an agent $40 and to reach the $50 cap the ticket price would have to be at least $625.
"The action taken by United Airlines today is deplorable and shortsighted," said Steve Loucks, a national spokesman for ASTA.
United said the new 8 percent commission on all international tickets purchased in the United States is already offered by Delta Air Lines Inc. and AMR Corp.'s American Airlines.
Loucks countered that both Delta and American airlines offer a higher commission on international fares booked as part of a tour and that United apparently doesn't plan to do so.
He said several airlines, including America West Holdings Corp., Southwest Airlines Co., Midwest Express Holdings Inc., Trans World Airlines Inc. and Alaska Airgroup Inc. don't have any caps on their U.S. commissions currently.
Chicago-based UAL couldn't be reached for comment. Its shares rose $1.375 to close at $85.875 in New York Stock Exchange trading today.
Star-Bulletin reporter Russ Lynch and
Bloomberg News contributed to this report.
