ational Airlines is flying its way out
of Chapter 11 bankruptcy. The Las Vegas-based carrier has secured a
$112 million financing package and hopes to end its bankruptcy next
The airline failed to convince the federal government that it
deserved a loan guarantee. Last month, the Air Transportation
Stabilization Board turned down a request for a $55.5 million
guarantee. That left private financing as the only escape hatch for
National has continued to support travel agencies, bucking the
zero-commission trend by paying an upcapped 10% to the trade. But
the pay policy is in jeopardy.
Some months ago at an ASTA meeting in Las Vegas, Michael Conway,
National's president and chief executive, warned that if agencies
didn't start driving more business to the airline, the commission
practice might change.
Conway was particularly exercised about the fact that many
agencies apply the same customer service charges to National
tickets as for other carriers' tickets even though the agencies
also earn commissions from National.
He urged agencies to give National a price advantage by waiving
or reducing service charges on the carrier's tickets.
Conway's appeal drew mixed response. Some agencies agreed that
they should waive service charges in order to provide the
commission-paying carrier with a price advantage.
But others argued that their service-charge policies should be
uniform and shouldn't vary according to a carrier's commission
In announcing its new financing last week, a National spokesman
renewed the call for greater support by agencies.
"We need to see some market shift, " the spokesman said. "We
have to make sure it's economically feasible for us to continue to
do this (pay the commissions) ... this really is the time now for
travel agencies to step up."
It would be a shame if one of the few airlines that has remained
steadfast in its support of agencies is forced to back off its
commission policy. But that is likely to happen if National doesn't
see a significant improvement in agency bookings in the very near