Travel Agents Versus Airlines
US travel agent new nemesis: debit memos from US carriers
It used to be the case that travel agents made money off of selling airline tickets. Today, the airlines have found ways to reverse the game and are now making money off of travel agents.
When US airlines’ commission imposed the zero commission policy on travel agents in 2002, the collaborative effort to sell air travel between US airlines and US travel agents disappeared into oblivion. Efforts were made, such as lawsuits, to fight the airlines’ move, but ultimately, such efforts proved futile. The paradigm had shifted. Travel agencies across the US scoured for ways to survive, and thankfully, a lot them found ways to do just that.
With the rising cost of fuel and current economic conditions, it is the US airlines’ turn to do what travel agents did back then—scouring for ways to survive. First, the peanuts went then the pillows and the blankets. Surely, the list will get longer and longer. But one thing is inevitable, sooner or later, just like many travel agencies did when the zero commission policy was imposed, some airlines will be left with no option but to close operations. As a matter of fact, some have already done so and by Aloha Airlines CEO David Banmiller’s estimation, their closure, along with the closure of ATA Airlines, “is just the tip of the iceberg.”
What’s unfortunate now is that some airlines have decided to take another stab at travel agents by way of debit memos. Case in point: Delta Air Lines. eTurboNews has received a letter from an outraged travel agent from California regarding a complaint she has against Delta Air Lines.
“I would like to express my outrage at a charge that we are being assessed by Delta for accidentally double booking a family of 3 on the same flights for a couple of days,” Carolyn Sweeney wrote. “I didn't realize I hadn't cancelled the first reservation when I made it again to recreate the fare for the clients.”
According to her, once the error was discovered, Delta Air Lines sent her agency “a possible dupe message,” prompting her to cancel both reservations. The bookings were made in late May for travel in December on connecting flights with 4 segments per person.
For this, Delta Air Lines has invoiced Sweeney’s agency US$50 per segment per person, totaling to US$600. “They will have ample opportunity to sell those seats in the intervening months, so it is hard to see how a charge of such magnitude is warranted,” Sweeney complained. “Where is the damage to them of such an extent?”
Sweeney added that she has written two letters “pleading for some understanding in this situation but has only an email address to communicate with.” She described Delta Air Lines responses as “two very brief, robotic, unsigned email responses.” Predictably, her request was denied by Delta. What was Delta’s explanation for the charges? The airline told her that "in all fairness to other travel agents," they have to charge her agency US$600.
According to Sweeney, Delta Air Lines has a new provision to draft out account for any debits they consider legitimate. “Obviously, they are looking at travel agencies as a new source of revenue,” Sweeney said. “I am so disgusted by this and feel so powerless.”
eTurboNews has also spoken to a Los Angeles-based travel agent about the issues of commission cuts and debit memos and found an even more disturbing response. He, for fear of retribution from the airlines, spoke on the condition of anonymity.
“We feel very terrible [about the commission cuts]; it’s extremely depressing, not encouraging at all,” he said. “As it is, the US travel industry is suffering because of terrorism and the stringent visa/passport rules, and yet, these airlines – I think they started in about 2000 or 2001 [started] with commission cuts from 8 percent to 5 percent to 3 percent to $10 one-way commission on domestic and then finally no commission at all on domestic, followed by zero commissions on international routes as well.”
The actual date for when the zero commission policy was imposed is March 15, 2002, and, this may come as no surprise, it was Delta Air Lines that spearheaded that trend, which has found its way across the global market. The Los Angeles-based travel agent recalls asking his colleagues then what to do. He was then told: “I guess we can all pitch up in some money to put up a tent, and it would be like a sob session for all the travel agencies where we can probably sit and vent out our frustrations.” According to him, “there was no collaborative effort by any agency or agent or membership like the American Society of Travel Agents (ASTA), which just basically could not do anything and still charge an annual fee from agencies to give them some ASTA recognition, which really means nothing.”
On top of his frustration about the commission cuts, the LA-based travel agent is also claiming that US airlines are making money by issuing debit memos when flight schedule changes are not acknowledged. He said: “Airlines are making schedule changes very, very often. Like my new changes, where the time changes from [a] 5:15 departure to 5:20 or the flight number changes, and the time remains the same. Airlines, through the reservation system, used to notify their agents and agencies as a courtesy so that we know of the changes that were made, and we can, in turn, let our clients know of all of the changes that have been made to the reservation.”
That was the case back then. Now, it is a different ballgame. “If we were to acknowledge the reservation and acknowledge these changes, then we are okay, but if we acknowledge, then there is yet another problem, which is that when you are e-ticketing a reservation, sometimes the back office creates a problem when the changes are made and during re-issuing the ticket or making some serious changes, we have to endure a lot of hassles without any commissions we get at all from any airline, pretty much.”
According to him, even if the travel agent takes note of the change and do not acknowledge it in the system, “the airlines send debit memos for not checking our queues, even if we check it, but there is no way we can tell them that we made note of it, if they don’t care – we have to acknowledge it.”
For this he feels that “as an agent, as an agency, we are at the losing end from every side-looking corner.” He added: “We [travel agents] hate to be in this situation, and airlines are relentless, they don’t care, they are not nice to talk to, they are not courteous, they are not friendly, and all these travel agents support Websites that airlines made are useless.”
The Los Angeles-based travel agent is enraged at the way airlines have been treating them. He said: “The Austrian airlines or one of these airlines very recently sent me an email saying, if you sell these tickets, we will give you a $25 Starbucks gift card. That’s a slap on our face! That the situation has come down to such that we have to take $25 in a Starbucks gift card as an encouragement to makes sales for that airline."