Air Transport World

Delta's 'shot heard 'round the world'.(limiting of travel agency commissions)

Black Thursday. That's probably how are referring to it in travel agencies. Thursday, Feb. 9, 1995: The day Delta Air lanes rebelled against soaring ticketdistribution costs by capping travel agency commissions at $50 per round-trip ticket or $25 for a 1-way fare (ATW,, 3/95). Delta's action, followed quickly by other U.S. majors, signals that airlines finally are serious about controlling distribution expense.

The significance of the action cannot be underestimated. "It's the most profound thing that's happened in distribution in all the 25 years I've been involved in it," says travel industry consultant Nick Bredimus.

Morten Beyer, chairman of McLean, Va.based MBA Assoc. agrees. "I think it marks the beginning of the end of the agents dominating the distribution system. I think this, coupled with ticketless travel, is going to have a very, very dramatic effect on travel agents."

Until last year, commission expense hail been one of the fastest-growing cost items. U.S. airlines paid $7.5 billion in commissions in 1993, 11. …

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