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 ticket.

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 can."

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 ticket.

How nice for Continental's shareholders that its management has no such qualms.

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI