On Mon, 25 Mar 2002 15:11:01 -0500, you wrote: > >But why should Delta pay a travel agent a commission for a ticket? How >often does a customer choose Delta over a competitor just because a travel >agent recommended them because of a commission? People choose American, >United, Delta, Northwest, and Continental because they're convenient and >well known. In lots of cities both large and small, it's not hard to figure >out a relatively fast, comparatively cheap way to get to some other city. >It's a no-brainer for me to look at both United and Northwest when I'm >considering travel between Washington and Minneapolis. Why would either >United or Northwest pay a travel agent? Heck, United wants me to call them >directly so there's no chance for someone to say, "Or you could fly Sun >Country." The airlines want me to come directly to them; they've got call >centers and web sites with retail access because customers look for them. > Let's paint a little scenario. Say that you work for a retailer - it could be in insurance, finance, travel - doesn't matter. It's at the month-end. You: "I hear that I might be losing my job!" Your manager: "That's because our suppliers have stopped paying us, so we've no money." "What! How can they do this? We are supposed to be partners!" "Don't be stupid - they regard us as competitors." "But don't we sell 75 percent of their stock?" "Yup." "So how can it make sense for them to stop paying us?" "Because there are only six or seven big players in the market, and once one caps or cuts commissions, the rest jump at the chance to level the playing field downwards." "But could they possibly field all those direct customers?" "Don't be daft. Even with increased internet sales, the number of reservations agents - and all the associated expenses like wages, insurance, accommodation, rent, electricity, etc - would have to increase hugely, thus more than wiping out any benefits from not paying commissions." "You mean, they still need us to sell their services - but they won't pay us!" That's disgusting!" "Got it in one." "Hang on, I've just thought of something else. Seeing that a lot of people will still need to book with us, for the practical reason that they can't all get onto an airline's agent, we can only survive by charging a service fee. So, doesn't that make an an effective price rise for the customer?" "Yup." "But wait, I've another thought. With these guys not paying us anymore, they'll make more money than before. So, they can cut their prices, yes?" "Oh dear, you've a lot to learn. These guys never cut their prices just because they've cut their costs! Just think eTicketing - saves a bundle now, but not one red cent has been passed on in fare reductions." -- Visit Caribbean Aviation: http://www.caribbeanaviation.com/ -----BEGIN GEEK CODE BLOCK----- Version: 3.12 GIT d? US W++ N++ o+++ w=20 b+ y+=20 ------END GEEK CODE BLOCK------