nflation must be wildly out of control
down there in Houston, where poor Continental Airlines found it
necessary to adopt a 33% increase in the change fee for
nonrefundable tickets, owing to rising costs 'n all. If
Continental's change sticks, it will cost the traveler $100,
instead of $75, to make an itinerary change on a nonrefundable
Need to sound off?
Click the image above to send an e-mail to TW. Your letter could
run in a future issue!
The revenue-generating potential of this change gets even better
for the airline when you factor in the diminishing compensation to
the travel agent. With the old change fee of $75, the agent would
keep $25, netting $50 to the carrier. With the new $100 fee, the
agent keeps $15, netting $85 to the carrier -- a 70% increase. That
should take care of those pesky ol' costs.
And what about agents' rising costs? Continental is well aware
that many agents already add their own service fee to these
transactions, often amounting to $25 or more, to reflect the time
spent overriding automated systems and dealing with the
accompanying paperwork. Reducing the agent's compensation to $15 is
the airline's way of saying "get it from the client, if you
This means an agency that previously added a $25 fee will now
have to get $35 from the client, just to stay even. The total cost
to the customer in this scenario would be $135, up from $100.
That's a 35% increase from the client's perspective, while the
agent's remuneration stays the same.
Some agents, including some who charge fees, are accustomed to
sending some clients directly to the airline for these clerical
chores. With the airline fee at $100, there will likely be many
more such referrals.
As one agent explained it to us recently, there are going to be
times when you'd just rather not ask a client to shell out a
hundred bucks, merely to change the flight number on a $250
How nice for Continental's shareholders that its management has
no such qualms.