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TRAVEL AGENTS UP IN THE AIR; 3 MAJOR CARRIERS CAP OVERSEAS COMMISSIONS.


Byline: Enrique Rivero Daily News Staff Writer

A year after the nation's airlines angered travel agents by cutting the commissions on domestic tickets, agents are taking off - this time as the carriers cap agents' cut for overseas flights.

In a cost-cutting move Friday, Chicago-based United Airlines changed the commission structure from an 8 percent base rate per international ticket to an 8 percent rate capped at $100 for each round-trip fare and $50 for one-way tickets.

On Tuesday, both American and Delta airlines followed suit - and agents fear others will follow.

It was bad enough when more than a dozen airlines last year reduced commissions on domestic flights from 10 percent to 8 percent per ticket, said Lynn Solky, owner of Designer Travel in Sherman Oaks.

``The impact is much greater now because the only way travel agents stay in businesses is by doing international travel,'' Solky said Wednesday.

Commissions can be as high as, say, the $320 that Solky expected to earn from a complicated, $4,000 international flight she arranged Wednesday for a client.

Had it been United, the maximum she could have earned was $100. Losses like that would likely have to be passed on to customers in the form of extra fees and charges.

``It's not fair for the consumer to pay so the airlines can save $100 million. That's greed,'' Solky said.

United spokesman Tony Molinaro said the move was intended to prepare the airline for a possibly turbulent financial year ahead. The Asian economic crisis, plus more competition from stronger overseas airlines, are eating into the company's profits.

United expects to save $100 million a year by imposing the cap. The airline paid about $1.5 billion in commissions last year, Molinaro said.

``We need to control our costs to prepare for what could be a challenging year next year, and commissions costs are our third-largest expense,'' he added. Molinaro said he expects the savings to be pumped into service improvements.

American Airlines officials on Wednesday would not comment on the changes. Delta Airlines officials could not be reached for comment late Wednesday afternoon.

Steve Loucks, a spokesman for the American Society of Travel Agents in Alexandria, Va., said consumers who balk at paying any additional travel agency fees and turn directly to the carriers are likely to miss out on any deals that other airlines may be offering.

COPYRIGHT 1998 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Nov 19, 1998
Words:395
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