NEW YORK -- Agency owners and managers are spending their caps
case settlement checks on everything from paying the rent to buying
Internet access and launching marketing initiatives, an informal
survey by Travel Weekly found.
About 25,000 agencies split the $55.8 million settlement in the
caps antitrust lawsuit, which stemmed from the first wave of pay
cuts three years ago next month. The suit was filed against seven
airlines in U.S. District Court, Minneapolis.
In some cases, the checks, which averaged about $2,200 per
agency, arrived as agents were desperate for funds to pay bills
that had accumulated since the latest commission cuts, last
September. In that round of reductions many domestic and
international lines dropped their base pay to 8%.
"I used it to meet expenses," said Sheila Kusters, of Travel
Experience, Santa Clara, Calif. Kusters said she is implementing
service fees this year because, without them, she will be out of
business in six months. The $500 she received from the settlement
was used immediately to pay bills and the rent.
"It was a godsend," said Judy Willard, of Sides Travel, Palo
Alto, Calif., who used the agency's $3,000 check to pay bills. "The
timing was wonderful for us because it came during the holidays
when our business is slow. It partially helped us out of a bad
financial situation."
Willard, whose agency implemented some service fees after the
1995 caps, said the September commission cut hurt her agency "big
time," and she is now going back to the service fee schedule,
raising some fees and implementing them on more services.
For Addie Lindstrom of Addie's You and I Travel, Portland, Ore.,
the check helped her agency out of a "tight squeeze" during the
holidays. "It was nice to be able to have the money so that I could
afford to pay my employees during two four-day weekends that we
took off," she said.
Donna Daniels, co-owner of Fox Travel/American Express in
Spring, Texas, said she is buying phones, modems and software with
her caps settlement money. "I'm using it to get individual Internet
capability for each [Apollo] terminal in my office; we surf the Net
so much for our clients." Daniels added, "I'm getting my wish list
taken care of. We have a chance to be the leader in technology in
my backyard."
Jim Eraso of Key Biscayne Travel in Key Biscayne, Fla., said his
agency received "peanuts." He said he wasn't disappointed, though,
because he did not expect "thousands and thousands of dollars."
Lee Raybourn, Gateway Travel, Portland, Ore., said there was no
doubt where her $900 was going -- in the bank to pay agency
operating expenses. "We will survive because I'm stubborn," she
said.
Faye Russell, president of W.T.M.I.C Travel, in Chicago, said
she is using her settlement check for newspaper and radio ads aimed
at the leisure market and for marketing promotions targeting
groups. "Every little bit counts," Russell said.
Laura Del Rosso, Ernest Blum and Jennifer Dorsey contributed
to this report.