GoingAway

I don't know what the sales upgrade refers to, but the TAs do get commission, albeit significantly smaller than they have seen in the past. I'm not sure I'd buy the comment, and believe its easier for them to explain their fee using that approach. Reality is those TA fees were created to supplement their fees when the commissions were drastically cut by the airlines, and it too will never go away.

JoeTravel

Will these cc processing fees be charged not only to travel agencies, but to all customers? Oh, maybe I shouldn't give the bean counters any ideas.

Fredd

For another take, David Rowell, the "Travel Insider," whose free newsletter I receive weekly, raises an alarm about this in his most recent issue. Scroll down the page and look under the heading Dinosaur Watching.

[excerpt]

But this new arrangement, soon to be introduced by United, would require the travel agency to establish their own independent merchant account with the credit card companies, and also would require the travel agency to somehow absorb the credit card company's fee (which, due to a travel agency's smaller size, is likely to be more than that negotiated by an airline). In the $300 example, the fee might increase to $9 (ie about 3%), but the airline now expects to get the entire $300 from the travel agency.

Now, let's think about this carefully. If the travel agency earns no commission from issuing you a ticket, how can they pay for the credit card fee? Clearly, they can't. So, guess who will now pay for this? Yes, you. So instead of paying $300 and the airline getting $294, now you'll pay $309 (or more) and the airline will get $300.

So United seeks to become a business that not only does not pay other companies to sell/distribute its product, but also seeks to not have to pay the credit card fees associated with selling its products either. Lucky United.

oldmonster

Sales upgrade is a type of SWU UA gives to TA, which can be applied to C/D/Y/B fare. If the agent uses a sales upgrade when issuing a ticket, he won't get any commission. Therefore, I will pay a separate agent fee to cover the loss of commission.

http://www.united.com/page/article/0...ypesofupgrades

GoingAway

It's actually this page http://www.united.com/page/article/0,6722,53068,00.html and I don't see how use of this in anyway changes the TAs commission structure .... I still believe it's a line and the fee is for their service, irrespective of the type of upgrade/ticket.

JoeTravel

Thanks to Fredd for shedding the light on this. We had all better be prepared.

oldmonster

I am not going to argue on whether the TA get the commission when she applies the cert. I am not a TA myself and I believe the relationship between a customer and a TA is based on trust. If I doubt her honest, I will go to .bomb or some other agents.

I agree that UA could potentially save on the merchant's fee if they require agents to charge customers on their own for tickets with commission. However, I do think at the end customers are picking up the tab.

emcampbe

I'm not sure what the big deal is.....doesn't this just make it like any other industry. If I buy a sony television from Best Buy, I use a credit card, and Best Buy pays the processiong fee. Now, it will be the same way for travel agencies and UA tickets, correct?

Seems more like a backend change, that will likely have little, if any effect for pax. If I buy a ticket from a TA, I'll still get charged a fee by them, just like before. And the fares will still incorporate the credit card fee charges. Because whether or not we realize it, before or after this change, we were all paying the credit card fees as part of the fare anyway.

kenhawk

Well, let's see....$3 per share UAUA stock, multi-million dollar quarterly losses, entire 737 fleet parked, upcoming union negotiations in January, oil prices rising, shrinking route network, UX taking over more and more domestic flying....

Yes, we should be worried.

oldmonster

Interesting, I have a Sept 4 UA381 segment still listed as 733.

kenhawk

They'll be running until Mid October and then will become part of the desert landscape.

1kwannabe

UHHHH, airlines stoped paying commission's to TA's about, oh 9 years ago...

BurBunny

Not quite. Best Buy purchases the TV at a wholesale price and sells it at retail, thus earning a profit from which the credit card charges are deducted along with the other costs of business.

In the scenario United is floating, it would be as if Best Buy were having to pay the TV manufacturer retail + 3% in order to sell the TV at retail. And the consumer could still purchase the TV direct from the manufacturer at retail. Guess who goes out of business or has to charge an even higher premium for their service?

It's interesting to note that the airlines have not actually benefitted from removing commissions on most domestic fares, as using travel agents helped the distribution channel and lowered the costs overall to the airlines by reducing customer service costs. In fact, some international airlines (and even a couple domestic) are playing around at reinstating commissions on a limited basis.

On international fares, there are still some commissions and overrides to be had.

Full disclaimer: I am a travel agent, albeit a non-ticketing one (I specialize in cruises and only do air when necessary and only for international itineraries using either the online sites or consolidators). Therefore, I don't have dog in this fight, but am still affected as airlines continue to seek short-term solutions which ultimately backfire in their long-term profitability and other travel vendors mistakenly follow suit.

phoenixgck

Usually you pay bulk fare price when buying from agent. It's already low compare to .bomb
Thus they don't want to lose revenue more.

NWILGuy

Good point. If you're an agent who sells bulk or discounted fares under an arrangement with United, I'm thinking you can already mark them up however you want and cover your costs of doing business (now apparently including card fees) there. So the Best Buy argument is valid for some agents and not for others.

On the whole consumer side it just occurred to me - how many of us get 1% cash back or work for a company that gets a rebate for card use? I do. So the airline is probably thinking "why pay Visa $2 on a $100 ticket so they can give the customer $1?" As much as we don't want additional fees - somebody has to pay for that right?

This could get interesting.