Travel agents offer to help airlines weather high-fuel costs

DFW Airport by Leocha

U.S. airlines in recent days reported first quarter losses of over $1 billion dollars against higher bills for fuel. Seven airfare increases so far this year prevented the losses from being even more damaging to airlines’ balance sheets. However, airlines face a potential consumer backlash this summer from angry travelers who are increasingly tired of both fare increases and hidden ancillary fees, which can now double the base price of a ticket.

On the managed travel front, more financial problems loom for airlines after Labor Day when many corporations move to curtail travel as they realize they under budgeted for air travel in 2011 because of fare increases and hidden fees. The fourth quarter could be a real financial black hole for many airlines. But there is a solution that would be embraced by all air travel consumers and financially benefit airlines.

In recent analyst calls to review first quarter earnings, and to provide going-forward guidance, some airlines pointed to airline product unbundling and the sale of ancillary fees as the “magic sauce” for climbing above increasing jet fuel prices. Well, why not accelerate the uptake and sale of ancillary fees and defeat surging fuel costs?

Travel agencies are eager to sell these services and could power airline revenues above the dark clouds on the horizon of rising oil prices. The airlines have built a very low-cost transmission system for the dissemination of fees through the airline-owned Airline Tariff Publishing Company. The system has been tested with some 26 airlines and 3 reservation systems and would cost no more than $3,000 per airline, per month. It’s ready to go!

This solution would provide rapid acceleration in growth of fee revenue, mitigate consumer anger in the marketplace thus supporting demand, and show regulators in Washington and Brussels that airlines are listening to their customers.

Editor’s question: Would you like to see travel agencies like Expedia, Orbitz, Priceline and Travelocity, and the corner travel agent selling more ancillary products like baggage fee, WiFi, seat reservations, etc. at the same time you make airline ticket purchases? Travel agents, what are your thoughts?

Kevin Mitchell is the Chairman of the Business Travel Coalition

Photo: DFW Airport ©Leocha

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  • John M

    I don’t believe that selling baggage fees at the point of sale will work because how many people know how many bags they are actually going take on a specific trip? Plus many corporate travelers will have status on at least one airline alliance and thus avoid paying any baggage fee. Think of the bag fee as the same pay for view movies in a hotel.

  • dcta

    Does anyone else think that this is an incredibly misleading headline? Can you believe for one second that I want to help the airlines take more of your money? Let’s see if you can understand this – it is my mission and plainly that of almost every Travel Agent – to make certain that I get you the lowest possible cost for your air travel: first because I see no reason whatsoever for someone to pay more than they must, and second, from a simply self-serving point of view – ever since the airlines did away with base commission, it’s been my mission to sell every air ticket for the lowest possible amount.

    You don’t really think the airlines are planning to share the bounty with us lowly Travel Agents? Really, there isn’t one Travel Agent who is anxious to assist the airlines in collecting these fees.

    Now onto the other side of this – Charlie goes on and on and on about making fares and fees “transparent” so that the consumer can comparison shop….while I already provide this info to my clients, I am all for having an easier way to do it. Isn’t this really what Charlie’s been asking for?

  • Charlie Leocha

    @dcta I am amazed, appalled, at your attitude. Don’t you want to help your clients by providing them service that they want and allow them to enjoy the convenience of one-stop shopping at your travel agency? Don’t you want to have the opportunity to give your clients the chance to learn the total cost of travel and allow them to make the purchase at your agency if they so choose? If not, please post a sign on your door and tell your clients that you are so mad at the airlines that you want to make their lives and the purchase of their airline tickets, seat reservations and ancillary fees more difficult.

    Do you always sell the lowest priced ticket? Don’t you ever sell business-class tickets or first-class tickets because your clients ask for them. I assume from your comment that you try to encourage them to buy the lowest, back-of-the-plane tickets, but I doubt that. You may have never sold an unrestricted airline ticket, but they are the right choice for some businessmen. Every client is different. Every client has a different need. A good travel agent will work for their client and keep their hatred of the airlines to themselves.

    You evidently are in the wrong business. I would expect you to be customer-serving rather than self-serving.

  • neal

    I agree with Charlie, I want to make sure that my clients gets a preferred seat if they want to pay for it. I am also willing to sell the upgrades for Premium Economy for United. I am also willing to charge my customer an extra fee above and beyond my normal fees to do this. This is a way to increase service fees that normally you aren’t able to raise without losing a corporate account. Don’t look at it as helping the airlines. They are self serving. But look at it as a way of helping yourself. When you go to McDonalds, the ask would you like fries or a coke to go with that burger. So would you like to upgrade your seat from coach?

  • dcta

    Charlie – re-read what I wrote. I’m saying that YOUR reasoning makes sense, but the headline is somewhat misleading as it implies TAs want to help the airlines collect more from the consumer. I’m agreeing with YOU, not the author.

    I do go out of my way to find lowest air fares when it fits the clients schedule/needs. There are times when it does not make sense to sell double connections or crazy routings – but I do not see my job as one in which it is my goal to make money for the airlines. As for your question about business class tickets or first class tickets – of course I sell them, but let me be clear – I find highly discounted ones unless there the client absolutely MUST have a fully refundable ticket. If I can’t find a highly discounted fare from an airline, I go to consolidators. The consumer is my client, not the airline and the airline is certainly not my “partner in travel” as they so like to call themselves.

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  • bodega

    @Editor, Priceline, Travelocity, Expedia, Orbitz are order takers, not travel consultants. Please note that there is a differece. The ‘corner travel agency’ as you call it, has travel consultants who work with clients to help them make a good choice in their travel. We work for the clients not the airlines. Once they stopped paying us, it removed any alliance we have to them. We all know that the fees benefit the carrier, not the passenger. What use to be a part of the flight is now piecemealed to death and costing the passenger more and more. As travel consultants, we have access to all the fees and let the clients know their options and help assist on when they might consider paying for those extras. Not sure what the order takers see or care to provide. I assume you know that when a fee is paid for in advance, it is often nonrefundable so passengers need to be very careful on what they pay for ithem in advance. So helping the carriers weather the higher costs isn’t a travel consultant’s concern but assisting their clients weather the constant hand out from the airline for money is.

  • Frank

    Charlie Leocha April 29, 2011 at 3:16 pm
    You evidently are in the wrong business. I would expect you to be customer-serving rather than self-serving.


    and, how many travel agencies BOOKED AWAY from Delta when they stopped AGENCY COMMISSIONS????

  • dcta

    Frank – the answer is “almost none”. Why? Simply because if Delta was the right airline for a particular client given route and price, then we sold it to that client. Unfortunately, we had to start charging fees for service. Believe me, had Travel Agents been so “self serving” as Charlie would have you believe, then Delta would have suffered greatly and would have ended up reinstating commissions.

  • Frank

    Almost none? I’ve been on travel boards for……ever. Many were very angry at this move, I think the move caused many to actually go out of business.