We never thought we'd hear ourselves say this, but maybe it's time to appoint a committee to bring the airline and agency communities back together. Given the current state of airline-agent relations, could a committee screw things up any worse than they are now?
We're not just referring to the animosity and distrust stirred up by United's recent ultimatum regarding credit card fees. That incident, which has not yet played itself out, is merely the latest example in a long series of events that have made a wreck of what ought to be a cordial and constructive business relationship between the airlines and their appointed agents.
Two years ago, in July 2007, our headlines were dominated by an ARC proposal to give agents and corporate clients a discount for paying cash, in an effort to reduce the airlines' credit card costs. The proposal fell apart, but it was clear from the ensuing buzz in the industry that reducing credit card costs had become a big item on the airlines' agenda and was not going to go away.
It is now two years later, and a cash-strapped United is delivering a unilateral ultimatum to a smattering of agents, placing the issue on the front burner again. But what has the industry done in the meantime to address the issue?
Not much. After ARC dropped the discount plan, everybody went back to tend their own gardens.
Nobody was in a position to take a broad look at the industry and coordinate a dialogue about the cost of processing travel agency payments and whether new technologies or more efficient business processes could help address it.
So the problem festered until some airline -- it happened to be United this time -- felt the last straw and did something untried, unexpected and unilateral.
Because of the imperfections of airline deregulation, we have retained a legacy arrangement where a group of airlines, under the auspices of ARC, collectively qualify travel agents and "appoint" them, holding them to fiduciary obligations under written contracts.
But despite this elaborate institutional infrastructure, there is no framework for members of these two armed camps to engage in any constructive dialogue about fundamental issues that might transcend their participation in ARC.
We remain to be convinced that the airline industry in general, or United in particular, deserves any more or less of a break on its credit card costs than any other business or industry segment. Virtually all enterprises have credit card processing costs. We all pay rent, we all have to buy liability insurance, we all have to contribute to Social Security, etc.
But if there is something particularly burdensome or inefficient about the way the airline industry handles credit card payments, then perhaps representatives of the airlines, their banks, their technology vendors, ARC and travel agents can discuss it constructively in an industry forum, free of the confrontational baggage that ARC just can't seem to shed.
Any such process would have to be sensitive to antitrust concerns, but if our antitrust watchdogs recognize the value of ARC, then they ought to tolerate a discussion that could, over time, add to its value.
We would prefer any number of committee meetings to the spectacle of disgruntled airlines randomly trying to throw their weight around.