TravelMole Interview: Terry McGabe, Stratton Travel Management

US Travel agents perhaps might be better off under the jurisdiction of the Federal Trade Commission instead of the Department of Transportation, where rulings “couldn’t be any worse,“ says Terry McGabe. “I don’t think we belong under the DOT as far as oversight goes. Maybe we should belong to the Federal Trade Commission. That’s my next battle,” she told TravelMole. “The DOT is trying to hold on to whatever regulatory power they can,” she added. ”What they’ve done is service their airline masters, and they’ve done a bang up job so far.” Ms McGabe, an outspoken critic of the airlines and the DOT, is president of the New Jersey-based Stratton Travel Management, a large, independently-owned regional agency that has been around since 1975. This holiday season will bring renewed attention to travel regulations. The Office of Management and Budget is expected either this month or next to complete its long-delayed proposals regarding the GDSs. Ms McGabe, who hopes the ruling will be in favor of deregulation, calls the DOT’s rules regarding CRSs “draconian” when it comes to travel agents. “For them, we’re certainly at the bottom of the food chain,” she said. In common with thousands of other US agents, Ms McGabe has lobbied the federal government for deregulation. She testified at Congressional hearings earlier this year. “All we want is fair competition against the Orbitzs of the world. They’re nothing more than a company store for the major airlines,” she said. Worldspan has been among major companies also urging deregulation. And Galileo International has urged the DOT to retain its mandatory participation provision, and to strengthen its definition to also apply to airlines maintaining marketing agreements with CRSs. She believes the airlines would just as soon eliminate agents and CRSs altogether. And while she is critical of how the airlines do business, she added: “I’ve always said healthy airlines are in our best interest, believe me. If the airlines are doing well, we’ll do well. I’m not in this to see the airlines go under.” Her company with more than 100 agents is heavily weighted towards corporate accounts, which comprise about 80% of the business. The majority of Stafford’s income source is from selling airline tickets, often as low as $5 for leisure travelers. She thinks the airlines have done a great job of convincing consumers that buying on the internet offers the cheapest possible ticket prices. When consumers spend hours going from site to site, she said, it is creating an “illusion of savings.” “I just wish consumers had a better understanding of the economics of using travel agents,” she said. She also has tried to educate the public about the value offered by agents. “There are still a lot of consumers, particularly in the leisure market, who would sell their grandmother for a five dollar differential in airline tickets,” she said. If the OMB does not try deregulation, she said, it’s akin to “another bailout for the airlines.“ She is hopeful that the OMB will opt for deregulation, though she declined to predict the outcome. “I hope it’s deregulation, anyway. It’s a Republican administration and they tend to favor deregulation,” she said.

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