Hawaiian halts pay to travel agents

By Andrew Gomes
Advertiser Staff Writer

Hawaiian Airlines joined other major U.S. air carriers yesterday by announcing that starting Monday it will no longer pay travel agents a 5 percent base commission for tickets sold in the United States, Canada, Puerto Rico and U.S. Virgin Islands.

Delta Air Lines started the policy in March, and was quickly followed by others, including American, Continental, Northwest and United.

The airlines had been lowering agent commissions since 1995, and made the final cut as a way to further reduce ticket distribution costs, the fourth-largest expense for carriers after labor, fuel and aircraft, according to the Air Transport Association.

Hawaiian, which paid $20 million in agent commissions last year, said it had to follow the other carriers to remain competitive.

"While travel agents continue to be a very important part of our ticket distribution system, it became necessary from a cost-competitive standpoint to follow the rest of the industry," said Hawaiian spokesman Keoni Wagner.

Aloha Airlines yesterday said it is still studying changes in commission payments implemented by other carriers, and has not made any decisions. Aloha pays travel agents 5 percent of the ticket price.

Travel agents sell roughly 75 percent of tickets for the nation's largest carriers, including Hawaiian. Interisland tickets sold as coupons are not affected by the change.

Hawaiian has been facing financial challenges since Sept. 11 and the planned merger with Aloha that unraveled this year.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.