Alexandria, Va., March 19, 2002 - Yesterday, the American Society of Travel Agents (ASTA) asked for emergency action from the Department of Transportation calling on an immediate ban on enforcement of productivity clauses that penalize agents for booking outside the GDS systems and a ban on the sale of Management Data Information Tapes and other media containing travel transaction information generated by travel agencies, except for information covering transactions on the lines of the purchasing airline. The National Business Travel Association (NBTA) filed a similar motion with the DOT.
“Now that Delta, American and Continental have eliminated base commissions for most agencies, it is ludicrous that travel agencies would still be subject to contract clauses imposed in a completely different economic environment,” said Richard M. Copland, CTC, ASTA president and CEO. “The clauses punish the agency every time it seeks to compete for business against the airlines` discriminatory pricing policies.
“If agents continue to be punished for booking on the Internet and other non-CRS sources, they will be compromised in their ability to serve the public`s transportation needs, and as 75 percent of the flying public still prefers using a travel agent to make their flight arrangements, three-quarters of American travelers will be affected,” he continued.
In its filing, the Society said, that two steps are essential: (1) travel agencies must be freed of the penalty clauses in their CRS contracts (generally called `productivity` clauses) so that agencies left in the cold by airlines not paying commissions can book on the Internet without being financially punished further by the CRSs, and (2) that the airlines not be placed in a further competitive advantage by continuing to have access to the transaction information generated on competing airlines while it develops and controls its private distribution system.
” ... Most CRS subscriber contracts contain clauses that in theory reward an agency for increased production and punish it for falling below the booked segment thresholds established when the contract was first created. In practice, these clauses have served mainly as a deterrent to the agency`s looking to non-CRS sources, such as the Internet, to make bookings that more nearly conform to their clients` needs. They do this by imposing a financial penalty on the agency based on the number of segments booked. Internet-booked segments are not tracked and do not count against performance thresholds.”
In this and previous filings, ASTA has maintained that airlines should not have the right to purchase the sales data of individual travel agencies because such information is used against agents for competitive purposes. With the Delta action, and the subsequent announcement from American Airlines and Continental Airlines, that risk increases exponentially. The productivity clauses deter agents from selling fares found on the Internet that are not available through GDSs.
“This information is used by airlines to “poach” on each others` business by identifying high-yield transactions, then pressuring travel agents to move the business to the poaching airline,” the filing explained. “The information is also invaluable to a large airline seeking to deter or defeat competition from low-fare carriers, a practice that the Justice Department has regarded with such significance as to lead it to sue one of the major airlines for predation.”
ASTA is urging its members to visit their local government representatives and make their feelings known on the effects that the recent elimination of base commissions has and will have on their agencies. In doing so, travel agents should request that their representatives write Transportation Secretary Norman Mineta, asking that he take immediate action on this filing.
To view the filing, please visit ASTA`s Web site at www.astanet.com/news/legfiling.asp.