RC's announcement that it will require
agencies to report their sales daily is the latest airline attempt
to tighten the vise on the distribution system.
The carriers' strategy has been clear for nearly a decade:
reduce compensation, discourage smaller agencies from remaining in
business and make the procedures agencies must follow as difficult
as possible.
The airlines' goals are working: according to the federal
commission that released a report on distribution last week, a
third of U.S. agencies have failed in the last eight years.
The ARC announcement about daily reports used the airlines'
financial plight as the major justification for the new
requirement. The airlines have to see the agency data on a more
timely basis, ARC advised, in order to conduct their business. Does
anyone believe that seeing the results of agency sales daily rather
than weekly will solve the airlines' woes?
A second rationale for the move was an accusation of agency
fraud in conjunction with the voiding of tickets. ARC maintained
that there is a rising tide of fraudulent activity and that weekly
reporting makes such malfeasance easier to accomplish, giving
unscrupulous agencies more time to do their deeds.
As usual, ARC provided no documentation to support this broad
characterization of the agency industry.
Perhaps the most virulent part of the ARC statement was the
section that insisted that the airlines were taking this action in
order to preserve the agency distribution system. There was a
thinly veiled threat that the airlines would seek other avenues if
agencies weren't more accountable. It must have come as a shock to
agencies that the carriers might seek alternatives to retail
distribution.
The airlines would get rid of most travel agencies tomorrow if
they could sell as many or more tickets at lower cost. But they
can't and they know it.
They also know, or should know, that the level of services they
provide is woefully inferior to the service that is available
through agencies.
Small case in point: the other day I decided to cash in some
miles in order to get upgrades on a forthcoming trip. I had gotten
the ticket from our corporate travel agency but called the
airlines' frequent flyer number to do the upgrades.
The airline agent told me I had to pay $50 to cash in the miles
because it was less than thirty days before departure. In taking my
credit card information, she forgot to ask for the expiration date
on the card. I thought that was odd but let it go.
A few days later the airline called to say it couldn't process
the transaction because its agent had forgotten to get the
expiration date. The airline asked me to call back. Of course it
didn't give me the number of the original agent or of the agent
making the follow-up call. So I had to call the general number and
go through the agonizingly long tape before a human answered.
Then when I got the pick-of the-draw agent on the phone, he
sounded unhappy, dull and confused. Eventually he entered the
expiration date and said the transaction was complete.
The conversation left me with a lack of confidence that all was
well. It also left me with a renewed confidence that airlines will
never be able to replace travel agencies.