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TWA Puts Cap on Commissions

May 12, 1998

ST. LOUIS (AP) _ Trans World Airlines said this week it will pay travel agents a maximum of $50 for domestic round-trip tickets, following an industry trend toward trimming commissions.

TWA used to pay agents 8 percent of ticket prices with no maximum. The airline lowered its commission rate in October but had held out on the maximum cap until now.

The move comes eight months after many major airlines cut commission rates to 8 percent from 10 percent and imposed $50 caps.

Pat Benson, president of Action Travel in St. Louis, where TWA is based, said the new cap could hurt agents more because it affects mostly higher-priced business fare tickets. For example, an agent would earn $50, instead of $80, on a $1,000 ticket.

TWA also has cut the commission on international tickets to 8 percent from 10 percent. There is no commission cap on those tickets. For ticket vendors on the Internet, TWA will pay a 5 percent commission with a maximum payment of $10.

Joe Vilmain, TWA’s vice president of sales and reservations, said TWA had resisted cutting agents’ fees in hopes that it would make them more likely to sell tickets on TWA.

The airline has been trying to lure back business travelers with easier cabin upgrades, more generous frequent flier awards and other incentives. Vilmain said TWA’s success in doing that prompted it to cap its commission.

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