US agent wins airline commission victory

Thursday, 17 Oct, 2003 0

In the wake of Lufthansa’s agreement to settle its involvement in a class action, anti-competitive lawsuit against the airlines, the agent who initiated the action has some advice for others in the travel business. She told TravelMole: “Support the airline who supports you, or us.”

American Society of Travel Agents (ASTA) member Sarah Futch Hall does not think airline commissions will again rise to ‘normal’ levels of 10% or more, but she also thinks the action by Lufthansa may eventually spark a “commission war” that will reinstate at least some portion of commissions.

She realizes not every agency can send clients to Lufthansa. Her own travel agency in Wilmington, NC, has limited opportunities as well, though Lufthansa has a code share agreement with United Airlines.

Hall’s lawsuit was filed in 1999 against the airlines on behalf of herself and other domestic travel agents. It alleges price fixing and conspiracy in reducing travel agent commissions to zero starting in 1997.

Hall and her attorneyare scheduled for a press conference later this month in Miami Beach during ASTA’s 73rd World Travel Congress and Cruise/Caribbeanfest.

“We’ll be telling agents to just be aware, and be supportive of airlines that support us, and to hold on, and hang in there,” she said.

Lufthansa was among several airlines named in the suit, including United Airlines, US Airways Inc., Alaska Airlines, Societe Air France, KLM Royal Dutch Airlines and Air Canada, among others.

A federal judge in Washington earlier this month approved Lufthansa’s proposal to settle its involvement in the suit, overruling objections filed by the Association of Retail Travel Agents, several hundred agents, and the Justice Department’s antitrust division.

Lufthansa is the first and only airline to settle the suit. Other defendants face a February 2 trial date.

Many industry commentators predict the airlines will settle out-of-court to avoid a possibly huge antitrust settlement.

ARTA, a key plaintiff in the case, as well as the United States Travel Registry, opposed the settlement offer for various reasons, including the argument that it set a bad precedent for other defendant airlines. The groups, while praising Hall for her „tenacity and courage in moving this case forward, called the Lufthansa offer “nothing more than a weak sales promotion.”

Ms Hall told TravelMole, however, that the move was “air and adequate for all travel agents, and it may open up other lines of communication.”

The agreement stipulates Lufthansa to create a performance-based incentive program called ‘Lufthansa Transatlantic Bonus Program,’ which offers bonuses up to $100 for each translating round-trip ticket sold.

Said Ms Hall: „The program gives the smaller travel agencies a chance to show they can make a difference, and we expect Lufthansa’s sales will get a huge boost.”

Practicing what she preaches, she has already booked clients on the airline, even though commissions won’t start until January of next year.