Buying tickets by phone to cost extra
By David Koenig
Associated Press
DALLAS — Northwest Airlines Corp. reversed a controversial service charge on travel agents yesterday after the nation's largest carrier, American Airlines, imposed several new ticket-booking fees but declined to match the one on travel-agent transactions.
American, a unit of AMR Corp., will begin assessing a service fee of $5 or $10 to buy a ticket over the telephone or at an airport counter, copying fees Northwest announced last week.
But after American's announcement, Eagan, Minn.-based Northwest said it would rescind a $7.50 service charge it had planned for round-trip tickets purchased through ticket distribution systems that travel agents use. American's fee plan did not match that fee for travel-agent transactions.
American expects to reap $25 million a year from the fees, which take effect Monday.
American will charge $5 for customers who buy a ticket through a telephone reservations center and $10 for customers who buy at the ticket counter. The charges will apply equally to one-way and round-trip tickets.
Northwest's $7.50 fee enraged travel agents, who said it amounted to a fare increase. Sabre Holdings Corp., which operates the retail Web site Travelocity, sued Northwest over the fees Aug. 24. Northwest countersued the next day, claiming a breach of contract.
A spokesman for Southlake-based Sabre, Michael Berman, said the company was "pleased this issue has been resolved" and that Sabre looks forward to again working with Northwest. Regarding the lawsuits, he said "we're going to let our respective lawyers work that out."
The American Society of Travel Agents and the Business Travel Coalition had asked the Justice Department to investigate Northwest's fees on tickets bought by travel agents, which they said were encouraging other carriers to also raise prices. Airlines are prohibited from acting together on pricing.
The business group praised American yesterday for not levying fees on travel-agent transactions. The group's chairman, Kevin Mitchell, said airlines should instead negotiate with corporate customers to reduce distribution costs.
Northwest also announced other changes to the fees it made public last week as part of an effort to cut its ticket-selling costs by $70 million. Spokesman Kurt Ebenhoch declined to comment on reasons for the change, and he did not have an updated cost-savings estimate.
Effective immediately, Northwest will expand its $5 call center fee and $10 ticket counter fee to include tickets for international travel.
Tim Wagner, a spokesman for American, said his airline's fee was designed to offset rising prices for fuel and keep a range of methods for buying tickets.
Wagner said the fee would affect about 20 percent of the tickets American sells. About 50 percent are sold through travel agents and corporate travel departments, and 30 percent are sold on American's Web site and other Internet outlets.
Airlines are trying to drive more sales to their Web sites, which are cheaper to operate than call centers and ticket counters.
AMR shares rose 35 cents, or 4.1 percent, to close at $8.98 yesterday on the New York Stock Exchange. Northwest shares climbed 49 cents, or 5.4 percent, to close at $9.60 on the Nasdaq Stock Market.
