ix months ago in this space, on the sixth anniversary of Delta's infamous 1995 commission cap, we suggested that it might be time for an inflation adjustment. The $25/$50 cap on domestic airline tickets hadn't changed in six years, but the equivalent purchasing power in current dollars was inching closer to $30/$60. We thought we had a point.

And now that the country's business travelers have had their way with the airlines by withholding their golden eggs, the airlines are simultaneously cutting costs, wooing leisure travelers and tinkering with the fare structure to get the suits and the briefcases back.

We thought this might be a good time for the airlines to do something to get the travel agents back, but American Airlines obviously doesn't think so and has reduced its maximum domestic one-way commission payment by more than half, to $10.


You could chalk this up to airline cost-cutting if you want to, but we don't believe this is about saving money anymore.

American's travel agent commission tab in the second quarter of this year fell 4.8%, to $260 million. It was the only major cost input on the carrier's public financial statement to show a decline. Every other cost item increased. Wages alone were up 27%, and total operating costs were up 41%, to $6.3 billion.

What American will save with this move is, in a word, peanuts. At bottom, this looks to us like a marketing decision, not a financial one. As a purely financial decision, it makes as much sense as eating a pizza with chocolate cake for dessert and then putting artificial sweetener in your iced tea.

There has been talk off and on about airline commissions going to zero. Some agents have thought about that scenario, and some of their views are reproduced elsewhere on this site.

If you haven't thought about the zero-commission scenario, now might be a good time.

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