Letter To The Editor
Why are airlines stealing from travel agencies?
I recently had an interesting discussion with one of the airlines that we book groups with. I was going through invoices related to an incentive group and noticed that the final balance due did not reflect the deposit we had paid when we blocked the group seats. I spoke to our rep, and she informed me that the deposit would be held until after the group travels. WHAT?!!!
“So you want the travel agency or the client to pay an extra 10 percent that you hold and draw interest on?” Her answer: “YES.” My reply: “WHY?” Her answer: “It’s our policy.”
No further explanation.
WHY should anyone pay an extra percentage over the total price even after the airline has 100 percent of payment and ticketing is done? WHY should an airline or any travel vendor be able to hold onto and draw interest on our money, not to block or hold inventory, but after all items are paid in full? We deserve a better explanation other then "it’s our policy.”
It is not FAIR. It requires the client or the agency to have or collect more money then the cost of the trip. If not, to borrow on funds and pay interest or penalty while airlines have another income source, untaxed, and probably not listed as income to the taxman. What justification is it for this extra fee - reimbursed or not? You are holding more money then you are due. The account is paid in full.
Any airline or company that requires travel agencies to pay this extra amount and does not count this deposit into the final payment or reimburse it at final payment, should justify the use of the funds, how they are banking those funds, and if they pay taxes on the interest or escrow. It is hard enough to get a business incentive and most group travel now, without the airlines trying to hurt business. “It’s our policy” is not an answer.
How about a listing of airlines that do not have this "policy" so we can avoid all others? We should say "NO" to doing business with those companies that have such a policy.
Comments
I have been in the travel business for over 30 years and it has not always been this way. Typically you put a deposit down on the group space and then pay the balance by the due date as determined by the airline. To my knowledge United was one of the first airlines to institute this policy of paying a deposit, then pay the full ticket price on the due date and then only after the group has departed and sometimes you have to wait until they return do you receive the initial deposit back.
These are the airlines that I have dealt with recently which do not have this policy. Southwest, Lufthansa and AirFrance. I do not work with any airline that will not apply the deposit towards the final purchase price of the ticket when it comes to group travel. I will advise the group leader that it is better to work with another airline.
What is our guarantee that they will refund the money? What if the airline claims bankruptcy in the meantime? We have no protection.
This is obviously a sore subject with me!
I have been in the travel business for 25 yrs, and it has always been that way.
This is something that ALL of us should have the State Attorney Generals look into for every State. If you know an attorney who is friendly have him write a letter to a State Attorney General and make it available for all of us to send to our respective attorney general.
Basically, the airlines feel they can do whatever they want, and they don't care if anyone likes it or not. To them, if you don't like their policy, then find another airline (unfortunately, I've run into several that do the same thing). There's no one to regulate them, and if we as agents (or clients) question them, they frankly don't care. As far as they're concerned - Who's going to stop them? (Too bad Southwest doesn't fly worldwide - they're the only reasonable and decent airline that actually treats passengers nicely).
How shocking, Gene!
Our "partners" in the industry are doing WHAT?
If you are going to complain about crimes against agencies, why not discuss the ones that have a MAJOR impact on our bottom lines, all available to the public on the airline owned or operated websites- specifically:
discounting published fares while offering us zippo commission, matching consolidator net fares, offering "sold out" inventory and bonus miles, etc.
so in fact your charged upfront a 110% of the sum and that is legal? I certainly would get advice from a laywer about this subject.
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