This week marks an anniversary to which young travel agents might be oblivious: the first domestic commission caps in 1995 that marked the airline industry's seven-year slide to "zero pay.


Many older agents remember those years as a period of gut-wrenching transitions that resulted in the demise of thousands of agencies and a stress test for many more that struggled to reorient their businesses.

It was a simpler time. Most agents did not charge service fees and earned a flat 10% (or more) on virtually all air tickets, which accounted for 60% of their business. For years, airlines willingly paid it because the widespread adoption of agency GDSs had created a vast and effective distribution network.

The World Wide Web was in its infancy. Like most consumers at the time, travel agents' experience with computer networks was for the most part limited to their use of online information services such as America Online, CompuServe or Prodigy, but only about 20% of agents were online and many didn't even use email.

But things were changing. The airlines had a bad year in 1994. Four of the majors -- Continental, Delta, TWA and US Airways (then USAir) racked up nearly $2 billion in losses. They were looking to cut costs.

Delta was the first to bring the hammer down, keeping the 10% rate but capping domestic agency commissions at $50 per roundtrip, effective Feb. 10, 1995. Most majors quickly matched.

Two-and-a-half years later, in September 1997, United brought the base rate to 8%. The following year, the $50 cap went international, and after a few more intermediate steps, the base rate went to zero in 2002.

By that time, the Internet had matured and the airlines had created Orbitz, bringing the level of airline-agent comity to yet another all-time low.

It is often said that this series of events created economic hardships on the one hand, and economic opportunities on the other.

On the plus side, it is said that agents became creative sales- and businesspeople, charging for their services like true professionals, leveraging the resources of co-ops and consortia, developing niches and specialties, exploring new ways of working such as partnerships, hosting and work-at-home arrangements.

Whereas agents once saw the Internet as a threat, they now see it as a necessary tool of their business.

The one thing time hasn't quite healed is the animosity and distrust that some agents feel toward airlines. That relationship got rocky and cold after the caps and while it has gotten warmer and smoother in recent years, we have never been able to shake the feeling that it's still "not quite right."    

Maybe airlines are just hard to love.

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