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Return of the Agents
Kirby's Korner · December 10, 1999

I never said the airlines weren't out to kill the travel agency community. I just said the decision by four of them to ban together to build an online travel agency Web site was made to compete with other online agency sites such as Travelocity.com and Expedia.com.

This week we've seen evidence that the airlines may have something more sinister in mind. At least one of the four airlines -- Continental Airlines -- joined America West Airlines and US Airways in offering 5 percent discounts for tickets purchased through their individual Web sites. Tickets -- good for virtually all flights on the three carriers -- must be purchased by Sunday for travel through the end of January. Readers might want to check out the offerings.

This isn't the first time we've seen system-wide sales from the airlines for purchases through their sites. But the two-month window for flying is the longest I can remember. And it shows the carriers think they can realize savings by selling through the Internet, which isn't the same point I tried to make two columns ago.

That column received angry responses from agents, and I dealt with the general themes last time. I promised then to present some specific responses now. But the "general themes" column -- and my view of systemic problems with the airline-travel agent relationship -- garnered the most thoughtful group of responses I've received from the efforts here at Ticked.com, not the second round of bitter replies I though I'd receive.

So let's tackle responses to the initial column this time and comments on the second column next time. And maybe then I can get back to writing about some of the fun aspects of the Internet, like why we men seem to be portrayed only as pigs!

Several agents expressed the same concern. As one correspondent put it, "Doesn't anyone see the potential for major bias and control here?" People I've talked to from Continental, Delta Air Lines, Northwest Airlines, and United Airlines tell me they don't plan to bias the flights presented on the still-unnamed four-airline Web site. And I have a suggestion that should satisfy everyone.

For "general purpose" travel Web sites owned by one or more airline or airline holding company, the U.S. Department of Transportation should adopt the bias rule it now applies to the travel industry Global Distribution Systems, which requires that GDSs owned by airlines present to travel agents that use them a screen of airline options that does not tilt in favor of the owner airlines. Under this proposal, Expedia could distort the choices it presents to the public because it is not owned by an airline. Travelocity could not, because it is owned by a company that also owns American Airlines. And it would not prevent US Airways, which sells flights for other airlines on its own Web site, from doing whatever it wants on that site, because its reservations system does not pretend to be unbiased or "general purpose."

This isn't a new idea. It was tossed around three or four years ago as the online sale of travel was first taking off. And it would be imposed for exactly the same reason the original GDS rule was adopted: to stop airlines with an ownership interest in a distribution system from exploiting that interest.

Other agents expressed concern that the four-airline site won't be open to all carriers. My "bias rule" proposal would take care of much of that concern from the consumer's point of view -- and from competing but non-participating airlines'. And if not all airlines participate in the new Web site, doesn't that leave more room for the agents who answered me to sell tickets to their customers?

Most of the rest of the comments were the same rhetoric we've heard from the agency community in their ongoing battle with airlines, and not particularly addressed to the four-airline site:

• "So far I have beat any price my clients have come up with on the Internet or by calling the airline direct." I don't doubt it, but what does that have to do with a new Web site?

• "You can sell millions and millions of airline tickets online and never turn a profit." Isn't that an argument for why brick-and-mortar agencies will be around forever, no matter how many mega-Web sites are created? And, as 1travel.com will tell you, you can sell fewer tickets online, not invest so heavily in marketing, and be profitable within a couple of years.

• "As a consumer," an agent said, "I think the Web and the telephone are too time-consuming and too frustrating, too confusing." Likely so. And, again, another reason not to worry about this new Web site.

• "I know a lot of people without computers who are unable to shop online." They'll still be your customers after this new site opens.

• "I also have had to explain to people who call, who are stuck with an Internet ticket, that I can't help them, because the airline won't let me exchange their tickets." A perfect opportunity to explain why they should bring their business to you next time.

• Major airlines "have been trying to put the little guy out of business for years." But you're still supporting them by selling their tickets, I assume.

One agent rather cleverly and in good humor twisted my column to claim I believe the four-airline site will be open to commissionable sales by agents. I don't think it will be, and I never said anything of the sort. But it may not be a bad idea. The airlines could connect directly to their own reservations systems, bypass the GDSs, pay commissions to agents that wanted to use it, and save GDS fees.

In short, even the agents don't seem to think this new Web site will change the landscape for them. To judge by their reactions, with or without the venture, they're screwed.

David Kirby is the editor of the Interactive Travel Report. His column appears on Friday. You can reach him at david@ticked.com.