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Travel Agents, Scared at Commission Losses, Fighting Back

February 21, 1995

TRENTON, N.J. (AP) _ Travel agents are turning to Congress, courts and customers to help them fight new limits on commissions imposed by the airlines earlier this month.

The American Society of Travel Agents Inc. announced today a strategy to fight the commission caps that includes legal action, legislative efforts and an advertising campaign.

Following Delta’s lead earlier this month, virtually every major airline announced a cap on commissions for domestic tickets, citing a need to cut costs partially because of competition from low-budget carriers. At $6.28 billion last year, U.S. airlines say that commissions are their third-biggest expense.

Under the new system, airlines will now pay agents up to $25 on one-way domestic tickets and $50 for round-trips, instead of a 10 percent commission per ticket.

``We are filing an antitrust, class action lawsuit against the major carriers alleging price-fixing,″ said Jeanne Epping, ASTA president and chief executive officer. ASTA represents 17,000-plus U.S. travel agencies.

At a news conference this morning at the groups’ headquarters in Alexandria, Va., ASTA officials said they have not yet determined when and where the lawsuit will be filed. But a national advertising campaign touting the services of travel agents is to kick off Friday with ads in the Wall Street Journal and USA Today, Epping said.

She also said the group would seek an immediate restraining order to stop the caps and would encourage travel agents to meet with their congressmen to press for the order.

At least one lawsuit has been filed against the major airlines, and groups of agents have been springing up from California to New Jersey to fight the airlines.

In the last week, some 2,000 angry travel agents met in New York and about 500 gathered at a hotel in Beverly Hills, Calif., before holding a street protest. In Torrance, Calif., a new group called Coalition for the Traveling Public says it has enlisted about 2,000 agencies in Florida, Illinois, Minnesota and New York to fight the cap. A hot line was set up in northern New Jersey to keep agents informed.

Debbie Donofrio, who organized a meeting of 250 irate travel agents in Newark last week, said ``There are some smaller agencies that said they’ll just close their doors and others that said they’d just cut back on their staffs. ...

``It’s going to be devastating,″ said Donofrio, owner of Boulevard Travel in Boonton. Donofrio said she may have to lay off half of her six employees.

Dick Knodt, executive vice-president of ASTA, criticized the airlines for essentially increasing prices to business customers, since many agencies with mostly corporate clients will have to impose fees for previously free services. American Express and Carlson Wagonlit Travel last week said they would soon do just that.

``Larger corporate travel agents probably get hurt in this more than a small, leisure-based travel agency″ because they handle the more expensive tickets for business travelers, Knodt said.

Smaller agencies fear imposing fees could lead customers to book directly with airlines, or through on-line computer services. Knodt said most agents are so opposed to fees that he does not expect them to crop up everywhere.

Travel Network Ltd. of Englewood Cliffs, N.J., a franchiser of 350 travel agencies around the world, last Wednesday sued five major U.S. airlines over the caps.

The Harrisburg, Pa.-based Association of Retail Travel Agents is organizing a trip Thursday to Washington to lobby key members of Congress and the Clinton administration. Donofrio is helping organize a similar event next Monday at New Jersey’s Statehouse.

Tom Romano, vice president of New Jersey’s ASTA chapter and owner of Lakeland Travel in Netcong, sees the commission cutbacks as the airline industry’s ``final evolution″ since deregulation in the late 1970s.

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