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."
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Comments
The main problem was the Airlines Sales executive who suppose to support Travel Agents so they could keep themselves in the job.This past 5 years I have seen so many Airlines sales executive has lost there job and some would be get fired soon,funny things are those who did lost the job they are now working with travel agency! Ha.Ha.Ha,so we still supported you, even you have shown your back to us as always.
Those employee of the Airlines who you call sales manager,sales executive blah, blah I have a message for them,most of the time you did not supported Travel Agency,you ignored them,you forgot that your salary was generated from the sales of Travel Agency's.
please try to understand your job was descriptions was based on a good communication with this giants Travel industry,but if there are zero commission and your own written survey for the first quarter was submitted to the Airlines corporate office,saying "Travel agency should be eliminated",but you never thought it would be you. And why should Airlines keep you in the job for doing nothing? You never return our call,never be there when we need you the most,never fight for unfair debit memos. I definitely find you people was the part of "zero commission" process.
Present USA administrations people like DOT,Feds,Labor dept.even ASTA etc. has not done any good for our community,growth of employment etc.they never make any objections when Foreign Carriers fired local American employee who was working for past 25 years and replace him/her within overnight with there imported employee from there own country who basically do not speak English and never been to the USA before.
Do you think this foreign Airlines are making all the profit from our blood hard working Americans, they should be patriot? why should? as long as they are helping there own people own economy, is all matter to them. In the USA foreign carriers charge child fare as same as an adult but in there own country they have discount for child,& senior citizens,& this foreign carriers thanks to Delta Airlines,because they was the first Airlines who came up with this radical business decisions.
Listen people,Zero Commission,and unfairness,or GDS provider became our copetitor,it is our fault we let them to do this,because we are not united,beside our government given them big tax cut,and let fire American employee and import there own people from there own country, because both options are legal.
By the way did you ever thought why government should interfere with this private corporations issues?
Government do not have to tell them whom they want to pay commission and whom they don't.
I would say why not? if they can bail out the Airlines,wall street,banks with Billions of our tax money then it is a vital role of the Government to protect our job in America and not ship to foreign country,It is a moral
obligations of the Government to protect us when Airlines play dirty game & are making free labor money which is 80% of there market profit & share by travel agency's thank you America for "free slavery".
Do not forget those people are in the government like congressman,Senators,big boss of DOT,FAA, when they fly with local airlines usually they got free upgrade in Business or First class and that is again freeeeeeeeeeeeeee. So tell me why the government,or congressman will help Travel Agency? You never give them free tickets in First class?
Oh I forgot to tell ASTA is a hopeless & helpless organization,Please stand tall on your own, you do not have to pay someone a fee for "recognitions" your agency and you are much better than unreliable organizations.
Thanks for reading this and hope for commission back by 2009,be united be an American.
I am surprised at the lack of experience with Delta's debit memos evident in these postings.
Delta, as well as all the airlines, has
ALWAYS issued debit memos that could
cut off agency ticketing ability if not
paid. The airlines have that ability.
I started as an agent in 1982.
One example - we had a client who bought a roundtrip ticket to Atlanta for $149,
only used half the ticket. Delta sent
us a debit memo for full price on both
ways, over a thousand dollars. Had we
not paid it, Delta would have taken the
agency's plates and then all the other airlines would have followed suit.
The liability for writing airline tickets through the airlines is too
high for the paltry service charge.
Advise if you must, but don't issue
tickets.
I have clients who just bought tickets from Delta for a cruise that starts in Barcelona and ends in Venice and who
bought their tickets by phone. When I
looked at their tickets I saw they
were roundtrip Barcelona, Delta's mistake. Delta would not change the
tickets without charging a reissue
fee plus the difference in the price
from the original ticket - over $600.
And it was their mistake.
Suppose I had made that mistake by issuing a ticket with the wrong return.
I would have been liable for the reissue charges.
well ..interesting article but I certainly don't think a comment as such from the president of aloha airlines holds much weight ..the guy has closed more airlines than proably anyother airline ex!
find some one with some credability that can speak for the industry ...
Dear Travel Colleagues,
Zero Commission from many Airlines is a gift. It gives us the opportunity to charge the appropriate service fee as professionals - and according to the level of service and time we spent in each case.
It is now the time to file Travel Agent's Signature to match the level of importance with an architect's signature, or an accountant's, or even a doctor's.
The shame is to those AIRLINES, that believe they will profit by keeping our ex-commision within the new-fare at zero commission, and at the same time droping the fee charged from their web or any other distribution network;
Let them count their sales volumes/distribution costs, after they will calculate the 10-20% plus on direct sales versa the drop by 30-40% from the Professional Travel Agents.
What they will do. If they will not bring commission back to Fares, or if they will not impose proper levels of service fees to their direct sales, they will be left out of FUEL.....
The Travel Agents developed TOURISM in the Industry. We are the last to close the door of our shops.
Be Professionals. Be TRAVEL AGENTS.
Vasilis Stamataris F Inst T T , ITC
Managing Director
TRAVELORAMA
NICOSIA - CYPRUS
I have been in the travel business for 31 years and have seen this industry from both sides, working for a major US carrier as well as owning and operating a travel agency. As a result I had many contacts and friends still working on the airline side of the industry at the time the commission cutting was happening. I ran into one of these friends around the time that the commission cap was set at 20.00 per ticket, this was particularly difficult in my agency as I have a referral only, high end travel agency. So lower volume and higher dollar sales. We went out for coffee after the conference we were at and our conversation turned to what was going on between the airlines and the agency community.I made the remark that I found it hard to believe that the airlines felt that 20.00 was all our efforts on their behalf was worth, and that if the airline industry kept up the assualt that it would drive agencies out of business and would require that the airlines hire more staff, train, pay and benefit these personnel and that they could not possibly think this is more cost effective in the long run. He smiled at me rather sadly and said "it is not the intent of the airlines to add personnel to pickup the load that the agencies will drop, the airlines want the travel agents out of the picture, because travel agents represent the best interests of the comsuming public and the airlines want the consumers on the internet, locked in and stupid." I came away with the sense that it didn't matter what I did to retool my business, that the airlines wanted me gone and they would do whatever it takes to make it happen. So this latest tatic is not surprising. I to have recieved my Delta debit, and can go one better than your other respondents, I went on vacation and an agent who covered my clients booked a reservation for one of them, when she ended and then redisplayed the booking 2 records came up, she was surprised as I had space on a 24 hour hold and she hadn't realized it, so she cancelled my booking and ticketed hers. I received a debit memo for 200.00 for holding duplicate space for less than 5 minutes. As a result I am no longer booking Delta unless I have no other option, and then I am not booking in my CRS on them. The auto ARC debit is in my opinion paramount to EXTORTION. Maybe we agents should start lobbying congress for the reregulation of the airline industry.
I read with great interest today an article in Newsday that Delta totally screwed up the seats of former Sen. D'Amato and his family from NY. Their attitude was "try to switch your seats with the person next to them." I too have experienced Delta's inability to run their business like professionals. I wrote to Delta and told them that they absolutely ruined a family group I had going to Punta Cana. I too got a very robatic customer service answer. I reiterated my reply to the Customer Service rep and Delta's CEO that Delta would absolutely be my "last choice" for any future group business. As far as I'm concerned, they can go out of business. I'll direct my business to the smaller carriers who are trying to survive!
REGARDING U.S. AIRLINES:
It's interesting how airlines seem to prefer risking bankrupcy to paying a fair commission to motivated sellers of their product - travel agents.
In 2001 a hot new cruise line, Renaissance Cruises went under after "disintermediating" travel agents. Once Renaissance realized their blunder and began to include agents again, 911 happened and the shock killed the line.
What we do not learn, we repeat.
Joe Hartnett
Principal Consultant
Hartnett & Associates
After Delta called my client directly to advise a schedule, leaving the message on her answering machine, she called me to see what was going on. I called Delta only to discover that Delta, without authority from client or agency, issued the ticket exchange, accepting the 7 hour earlier flight. I advised that this affected 4 other family members on different records and please put her back on the later flight. Delta said OK, then told me to issued the ticket in exchange for this new itinerary--that they already exchanged and are now in control of the record. I said I cannot exchange a Delta ticket. This went on for awhile. When I finally asked for a supervisor, I was told DELTA SUPERVISORS DO NOT TALK TO TRAVEL AGENTS! I did get it resolved after another 2 more hours, someone else at Delta did the exchange.
My family and I have been in the travel business for 30 years. After reading the Delta debit memo story, I would like to add my experiences to that.
A couple of airlines have outsourced accounting services overseas to dig up possible booking / ticketing violations going back more than 5 years. They are today raising debit memos to travel agents for tickets issued in 2002 and 2003. Which travel agent has stored records / contracts going back 5-6 years?
This is nothing but harrassment and a new revenue stream for the airlines.
You can be ARC and not have the hassel of air. Lets face it most of us can book on there sites charge our fee and the client is happy we are happy and no fees from airlines who have no idea how good we realy are. Book American Vacations and get paid for the air as well OR Us vacations
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