Policy May Increase The Cost Of Airfares

A new cap on travel agents' commissions introduced by major airlines last month will likely make travel more expensive, though it probably won't affect students buying airline tickets for spring break.

"There is no doubt in my mind that this new policy will definitely increase costs for consumers," said Patricia A. Gagman, director of quality management for Carlson/Aquarius Travel, a Cambridge travel agency.

Last month, all major airlines introduced a maximum commission payment of $50 for any round-trip domestic ticket with a base fare in excess of $250, according to an official statement by Delta Airlines.

Gagman said that $25 to $50 could be tacked on to the cost of each transaction, depending on the agency.

"[The airlines] are trying to make us pass on charges to clients," said Nancy A. McKenzie, vice-president of Harvard Travel Service.

"So far it's not affecting us terribly," she said. McKenzie said the agency added a small service fee on coupons in response to the cap, but has not yet levied service charges on regular tickets.

Omni Travel, located on Bow Street, is still deciding whether or not to charge fees on tickets, but Csilla Jacobson, president and CEO of the agency, said she expects the losses will be passed down to student travelers.

"We are still evaluating the situation, but the likelihood is that the students will be passed on a fee," she said. "[The loss] cannot be absorbed by travel agencies."

In an official statement, Robert W. Coggin, senior vice president of marketing for Delta Airlines, said "the realities of today's marketplace require substantial changes by Delta and its travel agents if we are to com- pete successfully."

Let's Go Travel agent Amanda P. Williams '96said that new policies like Delta's have had "nobig effect" at the Harvard Student Agenciessubsidiary. "Students are not being charged forour services," she said.

Less traditional travel agencies may actuallybe getting a boost to their business.

Fred Levinson, the owner of A Trip by Modem, anagency in which 25 percent of the business comesin through the Internet, said "[The cap] won'thave an effect on students who are customers ofours."

The cap became effective February 10, andapplies to all tickets issued by U.S. travelagents for travel within and between theContinental U.S., Alaska, Hawaii, Puerto Rico andthe U.S. Virgin Islands.

"Someone has got to pay [for this cap]. Thereis no free lunch," Gagman said.

The American Society of Travel Agents, a tradeassociation, has filed a class action anti-trustlawsuit against the airlines accusing them ofprice signalling, according to Gagman.

Valerie J. MacMillan contributed to thereporting of this article.

Let's Go Travel agent Amanda P. Williams '96said that new policies like Delta's have had "nobig effect" at the Harvard Student Agenciessubsidiary. "Students are not being charged forour services," she said.

Less traditional travel agencies may actuallybe getting a boost to their business.

Fred Levinson, the owner of A Trip by Modem, anagency in which 25 percent of the business comesin through the Internet, said "[The cap] won'thave an effect on students who are customers ofours."

The cap became effective February 10, andapplies to all tickets issued by U.S. travelagents for travel within and between theContinental U.S., Alaska, Hawaii, Puerto Rico andthe U.S. Virgin Islands.

"Someone has got to pay [for this cap]. Thereis no free lunch," Gagman said.

The American Society of Travel Agents, a tradeassociation, has filed a class action anti-trustlawsuit against the airlines accusing them ofprice signalling, according to Gagman.

Valerie J. MacMillan contributed to thereporting of this article.