More cost savings
 

A travel agent friend of mine received an industry e-mail publication stating that United was going to stop accepting credit card payments from some agencies so they could save some money. Are things THAT bad at United? They just started taking credit cards only for BOB and BEV (buy on board and adult beverages). Is there cause for concern?

http://www.btnonline.com/businesstra..._id=1003987948

It makes perfect sense to me. If the ticket is not bought from United, why should United have to have to pay the CC fees?

+1

agree 100%

Agree. I can't figure out why UA didn't do this a long time ago.

The days of full service airline backed travel agencies are over.

The question isn't whether to or not to do anything. I simply wonder how bad things are at United. Should we be worried? This announcement comes the same week as they are furloughing more flight attendants.

Because if someone is always using a certain TA and has a credit card doesn't have the need to be absolutely loyal to UA, they will react in an obvious way.

UA has been looking at ways to reduce its CC processing fees for years. That's part of the reason for the push for the Chase UA card, not only is the bank buying miles but its also charging UA less for processing. I wonder what TAs are being forced to make this change? I suspect its a lot of the small to medium sized account with a lower portion of premium traffic. In fact there are a lot of travel agencies that do not sell any profitable business with UA, take the extra ~1% credit card fee into account and these agencies are even bigger money losers. I suspect the accounts targeted are those that are not UA contracted TAs so the impact to UA customers will be limited.

This is nothing but good news. UA is making the tough decisions to make itself into a carrier that can survive this down turn. I'm sure they are making some enemies in some TA ranks but imagine the savings on spend of a couple hundred million dollars.

Well I buy international tickets from an agent using credit card. In many cases, I got a charge from United directly and a separate agent fee.

But will that change? Can't the travel agency just book on .bomb then charge an agent fee on top?

I booked through the agent because they can see some fares I can't get from .bomb. For example, for a OW ticket, the lowest I got from .bomb is M, while the agent booked me into L/S, which is about half price of that on .bomb. In other cases, I booked B fare in order to use the sales upgrade cert from the agent.

Also, I don't see any difference for UA between booking through an agent (but charged directly by UA) and using .bomb.

Right. This is what United wants to put a stop to.

I still did not get the point. The amount I paid is the same as the one I should pay if I book on .bomb. UA charged my credit card directly. Any difference to UA? I am paying the agent fee instead of UA paying commission.

It costs merchant's fees when you use a credit card. When you purchase FROM .bomb (aka United), United charges you and United pays the CC fees.

When you used your TA, instead of them charging you and paying the CC fees, they charged you on behalf of United, once again making United pay the CC fees, even though they are not the ones who issued the ticket.

I think the problem with this is that if the agent goes ahead and books for their customer on united.com then UA will have to pay the merchant fees anyhow so it doesn't really make a difference.

Seems to me like a good way for UA to lose a few more customers who get pushed by their TA to a different airline. Then again I'm not one of the experts who have so expertly guided UA into its current state of affairs so what do I know. In the current environment finding ways to reduce ease of purchase of your product by consumers is absolutely genius...what will they think of next?

What's the difference to UA (at least in my case)? They get the same amount (same fare with same CC merchant fee). I chatted with my agent and she told me she could not get commission from UA when applying the sales upgrade on the ticket. Therefore, I paid a separate agent fee. It seems to me that booking through TA and booking on .bomb are indifferential to UA as long as UA does not pay the agent commission, which is true in my case. If UA needs to pay the commission to the agent, it then makes sense that UA wants to stop the practice.