=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2002/03= /19/BU165506.DTL ---------------------------------------------------------------------- Tuesday, March 19, 2002 (SF Chronicle) 2 airlines halt fees to agents David Armstrong, Chronicle Staff Writer In a move that will hike travel costs for millions of passengers, Americ= an Airlines and Continental Airlines yesterday became the latest carriers that will no longer pay any commission to travel agents who sell domestic air tickets. The action by American, the world's largest airline, and Continental, the fourth largest, follows a decision four days ago by Delta Air Lines, the third largest, to end its commissions for tickets sold in the United States and Canada. Travel agents said they will have to raise service fees for clients to replace revenue that no longer comes from the airlines, which have steadily reduced commissions during the past seven years. Some 80 percent of all airline tickets are sold through travel agents, the rest by the airlines themselves. United Airlines, the largest carrier at San Francisco International Airport, refused to comment on whether it would match the move by the other carriers. As a result of the move by three of the nation's four largest airlines, travel agents will be forced to charge higher service fees for clients, said Paul Silvera, chief operating officer of Uniglobe International, an agency based in Vancouver, British Columbia Agencies said they will raise service fees from a current average of $25 to as high as $50, according to Silvera, who said his agency will scale the increase to the client and his situation. Uniglobe, a midsize agency that specializes in business travel, has downsized its San Francisco office from 28 agents to 15 due to slumping demand, especially since the terror attacks of Sept. 11, Silvera said. "We were just beginning to recover this quarter." Shrinking revenue has driven some 20 percent of America's travel agents out of business in the past few years, according to Terry Regan, owner of Berkeley Northside Travel. However, the more nimble agencies should survive, he said, because regul= ar fliers have come to trust agents and rely on additional information that they can't get from the airlines themselves, such as who is selling the very lowest fares on competitive routes. "Agencies will probably have to raise fees a little," acknowledged Paul Ruben, senior vice president for legal and industry affairs at the American Society of Travel Agents. "But agents were only getting a 3 percent commission with a cap of $20 per ticket anyway. We're still going to be there, doing our job." The elimination of commissions comes as cash-strapped airlines, which registered a record loss of more than $7 billion in 2001 due to the terrorist attacks and the slumping economy, are combing for ways to reduce costs. "Ticket distribution is the only one of the four major costs the airlines have real control over," said David Stempler, president of the Air Travelers Association. The other three -- labor, fuel and aircraft -- are more complex, he said. United, for example, barely averted a damaging strike by its mechanics this month but still plans to ask all its employees for difficult givebacks on wages and benefits. "The people who feel the need for the services of a travel agent should = be willing to pay for it in the form of service fees," Stempler said. "You ought to pay for what you use, but not pay for what you don't use." E-mail David Armstrong at davidarmstrong@sfchronicle.com.=20 ---------------------------------------------------------------------- Copyright 2002 SF Chronicle