f the airline cuts the commission to zero, are you still the airline's agent?

That was one of the first questions ASTA president Richard Copland asked in the wake of Delta's move to zero, and the question goes right to the heart of the matter: What does that big fat zero do to the airline-agency relationship?

The answer appears to be everything and nothing.

Compensation might not define the relationship, but it clearly reflects the value of the relationship -- for both parties. If the airlines believe that most travel agents can and should be compensated by the client rather than by the principal, what's the point of having a principal-agency relationship? It is only one of many kinds of producer-seller relationships, and it might not be the one for you. In fact, it might not be the one for the 21st century.

For many travel retailers, the traditional airline-agency relationship might be beginning to look and feel like a straitjacket that locks the intermediary into a legacy information system, an inflexible remitting regime and a one-way revenue stream.

Just as cruise-only, home-based and other agents have found, there are alternatives to the traditional one-size-fits-all approach to selling travel.

Concepts like net fares and dealerships were hated and feared by most agents 25 years ago but many of today's agents are openly discussing these concepts, even embracing them. As Copland put it, the zero commission scenario "has the potential of changing the entire structure of the agent's business relationship with the airlines."

We suspect that for many of our readers, that no longer sounds like such a bad thing.

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For the record

he myth persists in the general media that travel agent commissions are, as the Wall Street Journal put it recently, "one of the largest costs to airlines."

In the case of Delta, which ushered in the zero era, commissions are pretty far down the page of the carrier's 2001 profit-and-loss report.

Delta's commission payments came to $540 million last year, far behind $6.1 billion in salaries, $2 billion for fuel and $1 billion for various "contracted services." "Other" accounted for $816 million.

The carrier spent $800 million for maintenance materials and outside repairs, and $780 million on landing fees. Aircraft lease payments accounted for another $737 million.

We're almost there. But ahead of commissions are "other selling expenses" at $616 million.

Alert readers will notice that $540 million is the lowest number in this list, so far.

We left only one thing out: Passenger service, $466 million.

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