t's done. It's here. Zero commissions. There may be some chance that, for competitive reasons, the plan will be modified, but if history is any guide, Delta's move will soon be matched by other major airlines.

Delta's public statement referred to a "new market reality" that is "forcing both Delta and travel agents to adapt."

True enough, but we submit that agents, even though they expected that this day eventually would come, have been doing most of the adapting when it comes to changing patterns of distribution.

Not to diminish the economic pain that the airlines have endured since Sept. 11, but Delta did not produce an operating loss of $1.6 billion last year because of the inefficiencies of travel agency distribution.

The airline's survival does not hinge on this decision. Fortunately, the same can be said for those smart travel agents who have succeeded in diversifying their businesses.

Delta noted that the elimination of base commission rates "removes one of the last vestiges" of the regulated era when the commission rate was fixed "without regard to efficiencies or sales results ... In contrast, Delta's pay-for-performance program will reward key travel agencies."

Agents, now more than ever, have to cast off some vestiges of their own and aggressively cultivate preferred relationships on the basis of what the suppliers can do for them, because it looks like that will be the new reality.

Bad idea

e'd be the first to admit that the U.S. airline industry has had its share of problems lately, but we will also be the first to remind the government that any relief for airlines has to be fashioned in a way that does no harm to the rest of the travel industry.

Unfortunately, a group of charter airlines has laid a proposal at the doorstep of the Transportation Department that would do great harm to what has been, until now, a deregulated market for charters.

If you're a tour operator, meeting planner, incentive house or travel retailer, you can organize a charter flight from the U.S. to a foreign destination using virtually any airline that will agree to negotiate a price.

Since deregulation, the U.S. and many of its trading partners have permitted each other's airlines to operate so-called "fifth freedom" charters, meaning they don't go to the carrier's homeland. This allows a tour operator to entertain a bid from, say, a European airline for a charter between the U.S. and the Caribbean. This open competition is one reason why charters have remained competitive.

But the National Air Carrier Association, which represents some U.S. charter airlines, claims its members are losing too much business to foreign carriers that fly charters from the U.S. to third countries.

The DOT only allows such charters if the carrier's home government offers reciprocal opportunities to U.S. carriers, but NACA says this isn't enough. It says some of these carriers are from small countries whose outbound travel markets can't offer "equivalent" opportunities for U.S. airlines.

In such cases, NACA says, the DOT should give U.S. carriers a right of first refusal -- in effect, the right to step in when a tour operator and a foreign airline have a contract, and to take over that contract, "price notwithstanding."

That's the proposal, and we are hereby hooting it down. It was born of the same protectionist instincts that prevailed in this business before deregulation, when the charter industry's biggest problem was the "solution" it now seeks: government interference in the marketplace.

• • •

Lone warriors

teve Sedgwick and Sarah Hall have something in common. They're both travel agents, and they are fighting uphill battles in the federal court system over issues relating to the airlines' commission cutting.

In a new and separate case, travel agent Neal Dembo is taking on Pegasus over its hotel commission processing service.

Regardless of how these cases turn out, these agents deserve a tip of the hat for taking on such industry Goliaths in the courtroom, a battleground fraught with cost and uncertainty.

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI