"United’s proposal would effectively end many agents ability to sell space on the airline."
"Under United’s new policy, affected agencies would be required to process all United sales as cash transactions, being left to collect the ticket price from clients on their own, either by cash, check, or by charging a credit card to their own merchant account. This works out well for United...Implementing the program on a larger scale would increase liquidity by increasing the amount of cash the carrier receives from future ticket sales, which in turn helps to preserve liquidity. "
Bone headed decision or brilliant? Are the inmates running the assylum or is UA way out in front on this issue? Once again, UA is willing to challenge some norms as they tried about a year ago with their idea to charge for food on international flights. They had to back down from that ill-conceived policy. I'm not sure where I stand on this issue. The idea seems great from an airline's bean counter perspective but could backfire by sending corporate travel agencies looking for other "credit card restriction friendly" airlines with whom to do business. Obviously, most of those corporate agencies are booking highly desirable business travelers. Can UA afford to lose any of these high dollar flyers? In the end, I think this idea will be rescinded too as I can't see any of the other majors matching this policy in the present, dismal revenue climate.
LAXintl From United States, joined May 2000, 12166 posts, RR: 22 Reply 1, posted (5 months 1 week 2 hours ago) and read 9932 times:
Not a bad idea.
Let the travel agents cover the credit card transaction processing fees instead of the airline. In other words the airline gets to recover $100 of $100 of revenue instead of giving 2-4% away to credit card companies. It cost United $710 million last year in such charges.
The travel agents are free to pass or build the the fee onto their customers if they wish, as most charge service fees these days anyhow.
From the desert to the sea, to all of Southern California
Apodino From United States, joined Apr 2005, 2056 posts, RR: 7 Reply 2, posted (5 months 1 week 2 hours ago) and read 9869 times:
I can't blame them. If you think about it. Travel agents, and to a much greater extent, sites like Travelocity, Priceline, and Expedia, are largely responsible for the competitive pricing environment. If an airline is even 5 dollars more on price, they could very well be relegated to page 4 of the available itinerary for a given city pair. That makes it very tough for them to win business. That and the bulk discounts they sell seats for through travel sites, and they don't recover any of it.
LAXdude1023 From United States, joined Sep 2006, 4426 posts, RR: 22 Reply 4, posted (5 months 1 week 1 hour ago) and read 9627 times:
Its realitively simple. If UA is the only one doing this, agents will simply put customers on other carriers unless the price is low enough to cover it. Bear in mind most people who still use agencies on a retail level (i.e. not corporate agents) dont really have loyalty to a single carrier. So it would be easy to pass UA up.
LAXdude1023 From United States, joined Sep 2006, 4426 posts, RR: 22 Reply 6, posted (5 months 1 week 1 hour ago) and read 9610 times:
Quoting United1 (Reply 5): The majority of travel agents that UA has started passing this cost along to were ones who didn't do much business with UA in the first place.
To my knowledge, most agencies use a prefered system. Meaning they have prefered airlines (airlines that give them commission, waivers, and nett contracts). As long as UA doesnt alienate them, theyll probably be fine. I know quite a few agencies have UA as a prefered.
RiddlePilot215 From United States, joined Oct 2003, 300 posts, RR: 0 Reply 7, posted (5 months 1 week 1 hour ago) and read 9508 times:
I'm gonna have to go with United on this one...It just makes good business sense.
Why sell tickets through a middleman you have to "share" the money with, when you can just do it your own damn self?
This isn't the 1970s, most people are competent enough to know how to use a personal computer- open up a web browser, go to united.com, search for flights, and buy a ticket...
God is good, all the time. All the time, God is good.
Mariner From New Zealand, joined Nov 2001, 13665 posts, RR: 93 Reply 8, posted (5 months 1 week ago) and read 9494 times:
Quoting RiddlePilot215 (Reply 7): This isn't the 1970s, most people are competent enough to know how to use a personal computer- open up a web browser, go to united.com, search for flights, and buy a ticket...
I know how to do all that and if it is just a simple journey - there and back - I might do it.
But if it is anything more complex, a multi-leg itinerary involving hotels, I always go to a travel agent. Apart from anything else, I usually get very good deals.
ZKEYE From New Zealand, joined May 2005, 187 posts, RR: 2 Reply 9, posted (5 months 6 days 23 hours ago) and read 9344 times:
Quoting Mariner (Reply 8): But if it is anything more complex, a multi-leg itinerary involving hotels, I always go to a travel agent.
I couldn't agree more. Added to that when I use a travel agent if there is a problem of some sort I always just drop it in their lap to sort out (within reason). On a trip with a complex itinerary this, in my opinion, makes it worthwhile paying extra for - a good deal is just a bonus. For a simple return trip to Australia I would always book it myself though.
AirFRNT From United States, joined Jul 2004, 2521 posts, RR: 39 Reply 10, posted (5 months 6 days 18 hours ago) and read 9089 times:
Bear in mind, there may be one more reason United is doing this. United might be trying to avoid a Frontier style meltdown when it's credit card processor decides that United is no long a good credit risk, and increases the withholding rate. If these transactions are cash, it obviously changes the amount of liquidity United gets.
How are refunds/canceled/Insurance credit benefits for flights going to work for the consumer? There are strict safegaurds when a consumer is charged by a airline for a flight.
Bear in mind, there may be one more reason United is doing this. United might be trying to avoid a Frontier style meltdown when it's credit card processor decides that United is no long a good credit risk, and increases the withholding rate. If these transactions are cash, it obviously changes the amount of liquidity United gets.
bingo.
and don't think for a minute that UA isn't testing the waters to see how far the idea can be pushed.... and alot of other airlines and other merchants are watching. UA absorbs credit card fees for any customer only because it has to do so to remain competitive and because it needs that business. If UA succeeds at expanding the idea of the ultimate consumer paying the credit card fees, the whole business model begins to change.
It will also be interesting to watch how this plays out w/ credit card companies who are very protective in the US of ensuring that there is no penalizing credit card transactions by tackng on a surcharge.
Interestinly, in some parts of the world and even in some parts of the US economy, credit card transactions are preferred because they are safe and better than cash.
USPIT10L From United States, joined Mar 2006, 2626 posts, RR: 9 Reply 12, posted (5 months 6 days 15 hours ago) and read 8824 times:
Quoting LAXdude1023 (Reply 4): Its realitively simple. If UA is the only one doing this, agents will simply put customers on other carriers unless the price is low enough to cover it. Bear in mind most people who still use agencies on a retail level (i.e. not corporate agents) dont really have loyalty to a single carrier. So it would be easy to pass UA up.
I remember reading about "screen bias" back in the '80s from airlines like UA and AA, where they would have their flights first in the availability screen so as to get more sales from their res systems. That's been outlawed since then. Honestly, the only people that still use travel agents are older people. I would rather research the trip myself, and then call the airlines/hotels for the best prices. It's so much easier than paying someone to do it.
Quoting LAXdude1023 (Reply 6): To my knowledge, most agencies use a prefered system.
Yes, most agencies use a specific CRS, like SABRE, Apollo, or Worldspan.
Quoting Mariner (Reply 8): But if it is anything more complex, a multi-leg itinerary involving hotels, I always go to a travel agent. Apart from anything else, I usually get very good deals.
I can understand using them as a guide, but I would still do all the bookings myself or with my parent's CC. See above.
Offloaded From Gibraltar, joined Apr 2009, 196 posts, RR: 0 Reply 13, posted (5 months 6 days 15 hours ago) and read 8759 times:
Funny thing is people seem to forget that travel agents only got paid when they sold a ticket. They were the airline's sales force, so on reflection, how much money have airlines saved by cutting off travel agents? Like airline baggage charges. Did you notice your ticket price drop by 7% when your airline stopped paying TA commissions? I didn't. Did your airline discount you $15 because you aren't taking a bag? Of course not, they just added it.
LAXintl From United States, joined May 2000, 12166 posts, RR: 22 Reply 14, posted (5 months 6 days 15 hours ago) and read 8738 times:
Quoting AirFRNT (Reply 10): United might be trying to avoid a Frontier style meltdown when it's credit card processor decides that United is no long a good credit risk, and increases the withholding rate. If these transactions are cash, it obviously changes the amount of liquidity United gets.
No has nothing to do with such. Most airlines including United already have various holdbacks.
This exercise was designed to shift away the cost of bearing the processing fee by the airline and it eating into the ticket revenue. Now the travel agent would cover the cost, and airline get the full revenue of the ticket.
From the desert to the sea, to all of Southern California
Luv2cattlecall From United States, joined Sep 2007, 1495 posts, RR: 2 Reply 15, posted (5 months 6 days 15 hours ago) and read 8694 times:
Quoting LAXintl (Reply 1): The travel agents are free to pass or build the the fee onto their customers if they wish, as most charge service fees these days anyhow.
Quoting Apodino (Reply 2): I can't blame them. If you think about it. Travel agents, and to a much greater extent, sites like Travelocity, Priceline, and Expedia, are largely responsible for the competitive pricing environment. If an airline is even 5 dollars more on price, they could very well be relegated to page 4 of the available itinerary for a given city pair. That makes it very tough for them to win business. That and the bulk discounts they sell seats for through travel sites, and they don't recover any of it.
...One of the biggest travel search sites was founded by none other than a consortium consisting of CO, DL, NW, UA, and AA... it's their own problem.
Quoting RiddlePilot215 (Reply 7): I'm gonna have to go with United on this one...It just makes good business sense.
Why sell tickets through a middleman you have to "share" the money with, when you can just do it your own damn self?
Except they weren't "sharing" money with anyone in this case. If a pax books a ticket through UA directly, the airline eats the credit card processing fee. The current system with travel agents works exactly like that as well... UA doesn't get any more or any less on a $100 ticket when it's booked through a travel agency, since they don't pay a commission. Travel agents recoup that money with their fees to clients. UA is basically getting grabby and telling the travel agencies to eat the credit card processing costs, whicih I'm sure will cause a drop in bookings from affected agencies.
This will also cause problems for pax, since they'll no longer get automatic insurance coverage, etc from their CC company, nor will they get their bonus miles for using their card, since the payment is made out to Joe's ticket Shoppee....
Quoting United1 (Reply 5):
The majority of travel agents that UA has started passing this cost along to were ones who didn't do much business with UA in the first place.
...I would see that as a widely untapped market in that case. Delta started giving TA's a .5% kickback awhile ago I believe, with great results.
When you have to breaststroke to your connecting flight...it's a crash!
USPIT10L From United States, joined Mar 2006, 2626 posts, RR: 9 Reply 16, posted (5 months 6 days 15 hours ago) and read 8513 times:
Quoting Offloaded (Reply 13): For the record USPIT10L, at 38, I wouldn't consider myself "older people" but I do use my travel agent regularly, and I have my own credit card!
My apologies. Too late to edit the post! I don't mind planning a trip through an agency, but I don't book through them. That was the crux of my post. I also have a CC, but if my parents are traveling, THEY pay for the trip!
Jmbweeboy From United States, joined Feb 2006, 173 posts, RR: 0 Reply 17, posted (5 months 6 days 15 hours ago) and read 8471 times:
Quoting AirFRNT (Reply 10): Bear in mind, there may be one more reason United is doing this. United might be trying to avoid a Frontier style meltdown when it's credit card processor decides that United is no long a good credit risk, and increases the withholding rate. If these transactions are cash, it obviously changes the amount of liquidity United gets.
How are refunds/canceled/Insurance credit benefits for flights going to work for the consumer? There are strict safegaurds when a consumer is charged by a airline for a flight.
The above post is the first one which understands what is going on here. While one might think United corporate attorneys have ok'd this, consider the following: This move shifts to the travel agents the risk for paying out refunds if United goes bankrupt. While reducing the amount of money United that United has to keep in the bank to guard against credit card chargebacks, it would impose that requirement on travel agents for the first time. Travel agents' banks would have to honor charge back requests that could total billions of dollars in the event of a United bankruptcy. From a Mom and Pop travel agency to American Express Travel, no way that liability could be handled.
Traditionally, the "provider" of the service has been the one responsible for the credit card fee and all liability associated with that. Supposedly this is a "trial baloon" with smaller low producing agencies for United to see how it is received without incurring the wrath of larger producing agencies. The American Society of Travel Agents has already filed complaints with the U.S. Justice Department.
My own opinion is that this a less than well thought out move of desperation on the part of United in their struggle to survive that will quickly fall flat on its face.
United1 From United States, joined Oct 2003, 3155 posts, RR: 4 Reply 18, posted (5 months 6 days 14 hours ago) and read 8230 times:
Quoting Jmbweeboy (Reply 17): While reducing the amount of money United that United has to keep in the bank to guard against credit card chargebacks, it would impose that requirement on travel agents for the first time.
While I can certainly understand your point and I understand how you came to your conclusion you need to realize that this only effects an extremely small amount of the tickets that travel agents issue for UA every day. The change in the amount of money that UA needs to keep on hand due to its credit card processing agreements is minimal because of this change and quite frankly it wouldn't be worth going through all of this just to get access to that amount.
This is about trying to shift some of the $175 Million a year in credit card fees that UA has to pay.
Jmbweeboy From United States, joined Feb 2006, 173 posts, RR: 0 Reply 19, posted (5 months 6 days 14 hours ago) and read 7956 times:
Quoting United1 (Reply 18): While I can certainly understand your point and I understand how you came to your conclusion you need to realize that this only effects an extremely small amount of the tickets that travel agents issue for UA every day.
There is no doubting the "trial baloon" affects a small amount of tickets currently but one would be quite naive to not realize this is United's wish with all agency generated tickets. The reaction of the agency community has been fast and furious. But even more importantly will be the reaction of the credit card companies and the Justice Dept. With regard to the latter, there are different people there now than a year ago and my hunch is any attempt by a mega corporation to come down hard on small business in these very difficult times we live will not be well received.
United1 From United States, joined Oct 2003, 3155 posts, RR: 4 Reply 20, posted (5 months 6 days 13 hours ago) and read 7848 times:
Quoting Jmbweeboy (Reply 19): United's wish with all agency generated tickets.
Oh absolutely this is a trial to see how it goes but doing this to effect the credit card hold back? The amount of money UA has to keep on hand due to its credit card hold backs is somewhere around $25 Million, it's not worth the effort to get access to part of that amount by doing this.
AirNZ From United Kingdom (Northern Ireland), joined Feb 2005, 3103 posts, RR: 13 Reply 21, posted (5 months 6 days 13 hours ago) and read 7830 times:
Quoting RiddlePilot215 (Reply 7): This isn't the 1970s, most people are competent enough to know how to use a personal computer- open up a web browser, go to united.com, search for flights, and buy a ticket...
Are they? Many of the self-appointed experts on a.net can't even find their way around Fare Rules & Regulations (but insist they are correct!), so how do you expect the general public to do it, noting how often they are referred to on here as 'having no clue'. Sure, an nice, simple A to B seems relatively easy, but give me a complex itinerary and we'll see how many can book it. Remember, a complex booking [i]cannot[/]i be done on the likes of Expedia, Travelocity, Orbit, or any airline's own website. You're not taking into account such issues as Triangulation Fares, or manual fare calculation, combinability etc., etc.
Quoting Jmbweeboy (Reply 17): My own opinion is that this a less than well thought out move of desperation on the part of United in their struggle to survive that will quickly fall flat on its face.
Qblue From Canada, joined Jun 2004, 112 posts, RR: 0 Reply 22, posted (5 months 6 days 13 hours ago) and read 7598 times:
USPIT10L
Shame on you. You use travel agency to get infromation, use their brain and time without booking with them. They do not get paid to do that, they make their money by booking. You waste their time and talent then walk away to book it yourself. Please leave them alone so they can make time for other customers that they can make money on. United is first and if no big backlash others will follow.
Danild From Mexico, joined Jun 2005, 80 posts, RR: 0 Reply 23, posted (5 months 6 days 11 hours ago) and read 6974 times:
Quoting AirNZ (Reply 21): Quoting Jmbweeboy (Reply 17):
My own opinion is that this a less than well thought out move of desperation on the part of United in their struggle to survive that will quickly fall flat on its face.
I agree!
It's very simple they are trying to make the Travel Agents pay for their costs, which at least in my Agency is not going to happen. I will just steer customers to a different airline or inform them of this "unaceptable" business practice and pass the extra fee to the customer.
What is next will we (Travel Agents) have to pay for their fuel, and labor costs too???? where does this stop????
In the end it's not even going to matter that much because most agencies have prefferred accounts anyway and will not get affected, but it's very annoying how the airlines keep on attacking the travel agency community.
UAL777 From United States, joined Aug 2003, 1268 posts, RR: 3 Reply 24, posted (5 months 6 days 11 hours ago) and read 6923 times:
Quoting Jmbweeboy (Reply 17):
The above post is the first one which understands what is going on here. While one might think United corporate attorneys have ok'd this, consider the following: This move shifts to the travel agents the risk for paying out refunds if United goes bankrupt. While reducing the amount of money United that United has to keep in the bank to guard against credit card chargebacks, it would impose that requirement on travel agents for the first time. Travel agents' banks would have to honor charge back requests that could total billions of dollars in the event of a United bankruptcy. From a Mom and Pop travel agency to American Express Travel, no way that liability could be handled.
Traditionally, the "provider" of the service has been the one responsible for the credit card fee and all liability associated with that. Supposedly this is a "trial baloon" with smaller low producing agencies for United to see how it is received without incurring the wrath of larger producing agencies. The American Society of Travel Agents has already filed complaints with the U.S. Justice Department.
My own opinion is that this a less than well thought out move of desperation on the part of United in their struggle to survive that will quickly fall flat on its face.
Highly doubt it. They are trying it with agencies that do little business with UA as it is. Its just another creative way to try and cut costs.
Just say NO to scope relief! In fact, TAKE IT BACK!
Mariner From New Zealand, joined Nov 2001, 13665 posts, RR: 93 Reply 25, posted (5 months 6 days 11 hours ago) and read 6808 times:
Quoting USPIT10L (Reply 12): I can understand using them as a guide, but I would still do all the bookings myself or with my parent's CC. See above.
Each to their own.
But my travel agent in Los Angeles has always been able to get me first class for the price of business on almost all my international travels and seems to have a magic way with hotel bookings.
Don't knock it till you've tried it.
mariner
it's about the journey - not the arrival
26 Viscount724: Many people can't justify the time to compare fares on numerous airlines before booking. That is much easier if you have access to a major GDS system
27 UAL747DEN: Many people on here are confused about what we are doing and why so let me try to clarify things. The current way United deals with ticket sales at mo
28 Pellegrine: If I'm not mistaken the CC company is going to withhold payment to United, and all other airlines, until the date of flight anyway. But I can underst
29 UAL747DEN: A percentage is held but using this method after travel is complete the funds will be available just like any other transaction therefore mitigating
30 ORDagent: Travel agencies still have a vital part of the industry particularly when it comes to the corporate travel management side. An agent can massage the p
31 JMBWEEBOY: Full of erroneous statements in the above. First, the agent reports his sale of a United ticket through the Airline Reporting Corporation. That sale
32 USPIT10L: That's why you pay a yearly fee to AAA, so you can get road maps and TourBooks for free. Otherwise, I do most, if not all, my travel planning via the
33 TBYO787: This is just a clear indication of an Airlines preparing for chapter 7. Thanks God we dont sell UA at all. No commission, no sell. Good Luck UA.
34 Ikramerica: Except, they aren't allowed to do so. The credit card contracts within the USA forbid the companies from passing on credit card fees to customers. Wh
35 UAL777: A preparation for chapter 7? Come on! It is nothing of the sort.
36 United1: Not at all, have no idea how you came to that conclusion. All this is is UA trying something different, if it works expect others to follow.....
37 FlyASAGuy2005: I see most are saying for now, this will only affect a very small percentage of actual ticket sales through travel agencies. Others are saying the lar
38 LAXdude1023: No no, I mean they have prefered airlines. Some agencies have UA as a prefered, some have DL or AA or CO, etc. This strategy has agents pushing one c
39 FlyASAGuy2005: I've been to many countries and it seemed to me like travel agencies over there were like 7-11s in Virginia Beach; one on just about every corner . Bu
40 JMBWEEBOY: That's the same thing they said at Pan Am, remember ?
41 USPIT10L: Sometimes the two go hand in hand. If you're using Sabre, chances are, an airline that uses it is your primary business. In Pittsburgh, most of the o
42 DLDTW1962: As a Travel agency owner as well as an agent. I'm sitting here about to explode. The airlines are not paying any commissions to agents at all. Even th
43 UAL777: I checked the websites of ASTA, The Association of Canadian Travel Agents, Association of International Travel Agents, and the International Airlines
44 USPIT10L: I agree wholeheartedly. So much for selling Star Alliance at your office. UA continues to shoot itself in the foot with every decision they make. Jus
45 UAL777: That would be a good thing as then they might actually be consistantly profitable!
46 UAL747DEN: Travel agents have been threatening to not sell different airlines' tickets for years, so far it has yet to happen. Travel agents trying to throw the
47 LAXdude1023: Its a two way street. TA's give the airlines lots of business at no cost to the airline.
48 UAL747DEN: Really? You think that if the people didn't go to the travel agent they wouldn't fly? How many people really go to a travel agent that are going to u
49 AirNZ: You're talking complete unadulterated BS, and the sad thing is you don't even realize it in your rush to think you do know. Two examples: Which one i
50 United1: Does anyone happen to know what percentage of UAs sales are done through a TA
51 UAL747DEN: There you go again trying to make you point by only quoting a small part of the post and trying to twist words around to make them work in your favor
52 LAXdude1023: These will be my last comments to you since you obviously are absolutely clueless to how the airline/agency relationship works. Different airlines pa
53 ORDagent: BS! I worked as a travel agent for more than 15 years at one of the worlds largest travel management corporations. UA decided to pull some pricing st
54 EA CO AS: That's not entirely accurate. TA's actually can (and do!) cost airlines millions every year thanks to things like inventory churning, making speculat
55 ORDagent: Indeed these programs keep the agencies "honest". However these programs have cancelled reservations that are legit as they are part of an internatio
56 Panova98: Good Monday morning to you all. Hope you airline and travel agent people haven't all exploded over the 4th of July weekend reading all this. Sorry I c
57 Phollingsworth: Or in the case of some retailers actually cheaper than cash transactions, take Costco's branding with Amex or Target, which has their own bank. Peopl
58 EA CO AS: True, however the agency can simply call the airline to have them take steps to keep those programs from cancelling the PNRs in question. Most agenci
59 Ikramerica: Yes, i should have made that more clear. You can't advertise a different price between cash and credit, and you can't charge extra to use credit. Thi
60 FWAERJ: So true about not reading fine print. In fact, some of the new Visa Signature Preferred/World Elite MasterCard cards such as the Saks Fifth Avenue Ma
61 Access-Air: Yes, but that is just part of doing business.....It sounds like a lot, $710 Million but how much did they make on Baggage fees? How much do they give
62 USPIT10L: I don't consider myself a know-it-all, but you've got the basic point. If the airlines hadn't given up their own pricing system and worked with agenc
63 MogandoCI: Is it just me, or UAL747DEN sounds like someone from inside UA who's trying so very hard to spin this new PR disaster as a positive? If so, I congratu
64 UAL747DEN: LOL!! Your kidding right! You really think that the industry trouble comes from not working with travel agents? What kind of crap are these trade gro
65 MillwallSean: People takes this to personally. we all have to take one step back and analyse rather than see it through our own glasses. We have to remember that t
66 FWAERJ: In many US states, it's illegal. However, it's also built into the merchant rules found in Visa and MasterCard merchant processing agreements in the
67 United1: Big or small is irrelevant, the ones who did not do much business with UA are the ones this is being tested out on....
68 Ikramerica: Shocking to some people, but the USA does have quite a few consumer protection laws, mostly on the state level, but some on the federal level. Additi
69 LAXintl: Well this idea moved back 60-days. http://finance.yahoo.com/news/United...d-fee-apf-2359167373.html?x=0&.v=2
70 JMBWEEBOY: Read this morning apparently only 28 agencies received the original notice! Like what's the point ? Well point is likely that this was indeed a trial
71 Blrsea: I was trying to book tickets on BA through travel agents, and more than a couple of agents told me that BA doesn't accept credit cards and that I have
72 FXramper: 71 replies and the best most logically broken down one is still the first. Agree 100%.
73 United1: Besides wasting my tax dollars what's the point? UA already announced that they are delaying implementing this at all 28 affected agencies for at lea
74 Access-Air: [quote=UAL747DEN,reply=64]LOL!! Your kidding right! You really think that the industry trouble comes from not working with travel agents? What kind of
75 Ikramerica: You obviously didn't read all 71, as what he proposes would not be allowed under the travel agent's credit card contracts unless it applied to all cu
76 Lightsaber: June 2001 would have been the end. That was the launch of Orbitz. The hype and marketing of that sight worked. I never bought a ticket through a trav
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