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.