here's a lot to like in the settlement
agreement between Lufthansa and North Carolina travel agent Sarah
Hall, the lead plaintiff in a class-action suit against 17 U.S.
and foreign airlines, agreed to let Lufthansa off the hook after
the airline agreed to implement an incentive commission regime for
all of its U.S. agents and to make its Web fares available to
agents on its Web site.
And for agents who are no longer in business, it agreed to issue
"make-up" payments for tickets issued after the 1998 commission
cut, equal to the difference between 10% and what they were
We're sure that more than a few vengeful agents would prefer
that Lufthansa and the other airlines simply take out their
checkbooks and make amends for their commission cuts with the
universal lubricant. But in view of the airline industry's
financial situation, few airlines are likely to offer a big cash
And as the industry discovered in earlier litigation over the
1995 commission caps, a big cash settlement minus attorneys fees,
divided by thousands of travel agents, did not yield much to
individual agents. For that reason, it was not as widely
appreciated as it might have been. Nor did it give the airlines
much reason to appreciate travel agents.
Hall and Lufthansa came up with a constructive arrangement that
could help both sides. We like it for that reason. Unlike the
earlier settlement, this agreement says, "Let's bury the hatchet
and work together."
We recognize, however, that Lufthansa is proposing to adopt
marketing programs similar to those that other carriers already
have and that it might be forced to adopt for competitive reasons
in any event. Whether that deficiency is a deal-breaker is a
question for the judge and the plaintiffs.
Lufthansa is the first airline to agree to settle this case.
Other airlines may have to take different routes, and other
plaintiffs may shake their heads and say, "It's not enough," as
ARTA already has done.
This being the planet Earth, unalloyed goodness is hard to find.
But if this action really is the beginning of the end of this case,
we believe it's a good beginning.
• • •
Trains and planes
ongratulations to San
Francisco, the latest U.S. city to link its major airport with a
mass transit rail system. Bay area patrons of OAK long have enjoyed
the option of taking the BART train to the plane and we're happy to
see that SFO now is on track.
Unfortunately, this kind of intermodal connectivity is a reality
in only a handful of U.S. cities. As reported in today's news
pages, a major obstacle to these kinds of projects is not just
finding enough money, but finding it from the right sources.
In the case of the BART extension, the Federal Transit
Administration came up with half of the required $1.5 billion, but
the remainder had to be cobbled together from various state and
We're glad it finally came together for SFO. Ride on.