NEW YORK -- The message of 1997 is clear: The mere issuance of
airline tickets is no longer a viable career option. To many who
have considered it the bread and butter of their livelihood, it is
a harsh message; to those who embrace change and have confidence in
their own creativity, it signals new possibilities.
The technological revolution reached a new plateau in 1997. Just
as the introduction of airline computerized reservations systems
into agency offices in the 1970s put the distribution of airline
tickets squarely into the retail market, the refinement of new
technologies is eroding that dominance.
The cutting of the base commission rate to 8% was only one sign
of the times:
British Airways set up a new paradigm, with base rates of 5%
for Concorde and first class, 7% for business class and 10% for
economy. But those rates are "starting points;" actual rates would
be paid according to an agency's ability to promote and sell the
carrier's products. Mere "transactions" would earn transaction fees
below the base rate, while active promotion could earn more.Lufthansa said it also would introduce a pay-for-performance
commission concept in the U.S. in 1998, noting that its
compensation structure in Germany takes into account an agency's
willingness to promote the use of E-Tickets.Lufthansa also said it wanted to double the rate of direct
bookings, whether through the Internet, the airline's own "virtual
agencies" or its reservations supercenters, over the next five
years.United president John Edwardson indicated that the carrier was
dissatisfied with the pace at which agents were selling E-Tickets;
acceptance among direct-booking passengers was much higher, he
said.Southwest, which maintained the 10% base rate, made some low
fares available only over the Internet, and it made them
noncommissionable.The recurring theme in all these events is that at least some
carriers want to recapture those segments of the business in which
the services of an intermediary no longer are necessary to the
airline or to the customer. They also want to skirt the CRSs, whose
ever-rising fees offer no corresponding additional benefit to the
airlines.
Take Northwest's annual Christmas excursions to the Mall of
America, a case of point-to-point commodity travel in its purest
form. The fare applies to same-day travel, so no hotel or car
rental component is involved; the passenger does not need a paper
document; a low fare can be offered because it is booked on the
carrier's Web site and eliminates CRS transaction fees, and because
other discount fares typically carry Saturday-night-stay and other
restrictions, it is unlikely that an agent could find a better fare
for a same-day shopping trip.
It is difficult to see what service an agent can perform, either
for the client or for Northwest, by making this booking. The
carrier will pay a commission if an agent books the Mall of America
flight. The question an agent must ask is: "Why would I want to?"
Such a transaction is neither profitable nor fun.
Who, 15 years ago, envisioned that today an ordinary person
could use a home computer to view an airline's schedule, fares and
availability, book a flight, choose a seat and pay for an
"electronic" ticket?
Many agents point out that this person is not necessarily
getting the best deal; that an airline's Web site will not contain
information on competing low-fare carriers; that there are still
many kinks to be worked out in electronic ticketing. These
statements are true. But many travelers today are savvy about what
is available, and they will survey several options before
buying.
The problems with electronic ticketing will surely be worked
out, and it's just a matter of time before someone introduces a
user-friendly way to find the lowest fare between two points, even
if it involves an "illogical" connection.
In reviewing the events of the past year, it may be helpful to
recall that travel agencies existed before the Wright brothers ever
got an airplane off the ground; they served a purpose then, and
they can serve a purpose now.