COLUMN ONE : Travel Agents Hit Turbulence : Technology is squeezing out the middlemen, giving passengers direct access to the best fares and routes. Ticket purchases soon will be as easy as using an ATM at the grocery store.

When leading U.S. airlines moved last week to cap travel agents’ commissions on airplane tickets, Jackie Abkion was furious.

“The airlines are trying to get rid of us,” said the Glendale travel agent. And the commission cap was not her only complaint: Hotels are cutting their payments to agents. Big corporate customers are demanding discounts. And even large retailers such as Costco are writing discount plane tickets for customers.

“This is what the travel industry has come to,” Abkion moaned. “It used to be a very prestigious job. Now even grocery stores are issuing tickets.”

Abkion is on to something. Travel agents do not have the cachet they once had. But don’t blame cutthroat competition among the nation’s airlines.

New technology is breaking the agents’ monopolies on information and distribution. Fare and schedule information is now available in myriad ways. Automated systems are beginning to take over the ticket-writing process. “Intelligent agents,” essentially sophisticated software programs, will soon be able to plan a traveler’s itinerary. Passengers and airlines alike are finding that they just don’t need travel agents anymore.

And though it is small comfort for Abkion and her colleagues, travel agents are hardly alone. They are among millions of “middlemen” who are finding themselves disenfranchised by new technology.

“There are a whole bunch of businesses that make their living brokering between sellers and buyers like real estate, travel and auto dealers, where people don’t perceive a lot of value from dealing with them,” said Jeffrey A. Rayport, assistant professor at Harvard University’s School of Business Administration.

“There is a crying need for the opportunity to circumvent them. Networking technology provides that opportunity.”

Banking already has been transformed: There is no reason to have a teller take your money and record a transaction when an ATM can do it as easily. Tens of thousands of tellers have lost their jobs. And local banks, whose strength had been their proximity to customers, find it difficult to compete now that distant, large institutions can maintain local presence via the networked ATM.

Real estate agents could be the next victims. They have access to comprehensive house listings and thus people are obliged to pay them commissions. But as information becomes available over computer systems, their power will erode.

Still, few industries provide as stark a study in the vulnerability of the middleman as do travel agencies.

Start with the function of providing flight information. Agents long have had exclusive access to sophisticated reservation systems that could call up the best route and fare for a particular trip. But two years ago, American Airlines gave consumers access to a similar system when it offered Eaasy Sabre over networks like America Online. So far, about 2 million people have used the system.

Such access is getting easier. Motorola’s new pocketbook-sized digital device, the Envoy, hooks into a wireless network that allows a traveler in a cab heading to the airport to find out what flights have seats available.

DOCUNET Inc., a South San Francisco start-up firm working with EDS, the giant Dallas-based computer services company, recently installed the first of 6,000 ATM-type machines at grocery stores and in office lobbies nationwide. Slip in a credit card and in 27 seconds the machine will print out the itinerary and ticket for reservations made earlier through the airline or an agent.

The travel business is vulnerable to technology changes in part because of the vast amount of inefficiency built into the system. About $30 of every $100 spent on airline travel is siphoned away in the distribution process by agents’ commissions, courier delivery of tickets and the transaction costs of reservations systems.

“Now you’re going to see more direct connections between the supplier (airlines) and the consumer,” said Abbas Rizavi, vice president of EDS’ Travel and Transportation Group.

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About 85% of travelers still make reservations through agents, and many may prefer human contact. And agents at their best provide a range of advice on faraway places that no machine could match.

But just as bank ATMs have taken over simple transactions, leaving the complex cases for bankers, new technology will take much of the menial labor out of the agents’ business and push them to offer more unique services involving complex arrangements.

“Technology and financial necessity are forcing a transformation in the industry,” said Tom Blakeley, a computer consultant in the travel business. He estimates that about half of the 33,000 agencies will be absorbed by larger firms or go out of business within 15 years.

The winners, Blakeley said, will be those who can exploit the new technology to expand their reach: “He who controls the cyberworld of distribution will get the big market share.”

The disadvantages faced by the 250,000 travel agents who operate across the nation are clear from the apparent ease with which airlines recently slashed commissions on fares.

When Delta Airlines began the war by putting a $50 cap on commissions for round-trip tickets--rather than paying a 10% commission on all fares--agents threatened to retaliate by steering customers to other airlines. But when other major carriers followed suit, the agents found themselves powerless. The agents plan a lawsuit in the hope of forcing the airlines to change course, but it appears to be an uphill fight.

Airlines have begun exploiting technology to reduce their reliance on travel agents. Southwest Airlines is building two reservation centers that each will house a thousand agents. Already, 55% of the company’s reservations are made directly, compared to 15% for the industry.

The company moved this month to streamline the process by becoming the first airline to eliminate the use of tickets. Travelers receive only a confirmation number, as they do with hotel or rental car reservations. United, Northwest and other major airlines also are experimenting with ticketless systems.

Ticketless travel, combined with ticket-printing systems such as DOCUNET for complicated arrangements involving connecting flights, eventually could eliminate the last barrier to making arrangements purely electronically. For airlines--and, in theory, for travelers--this would lower costs.

DOCUNET will charge airlines and agents $7 for the service of printing a ticket, setting an itinerary and clearing the financial transaction on its ATM-style machines using the buyer’s credit card. Consultants estimate that service costs airlines about $35 and agents about $25 to perform.

When such machines become widely available--DOCUNET expects to have 1,000 operating in key locations by year’s end--resourceful agents will be able to work with clients from distant, low-cost reservation centers and have customers pick up tickets at machines near them.

Users of on-line systems who once checked schedules but seldom made reservations because they had to go to agents to pick up tickets, may cut out the agent.

And portable computer devices also will let travelers take more control over their schedules.

“Travel is personal, more people would like to know what their options are in case they need to make changes,” said Mel Troudeau, senior vice president at Official Airlines Guides, the Reed Travel Group division that developed the software used on Motorola’s Envoy.

“I’m in Chicago. Before setting up a meeting with someone on the East Coast, I want to see what time I can get there in the morning,” said Claire Cosgrove, who admits that as a business development manager at ARDIS, the wireless subsidiary of Motorola, she is a biased observer.

Later this year, the Official Airlines Guides’ product will be upgraded to support “intelligent agent” software. In making a reservation, a traveler could ask the system for updates on the flight. The software automatically would dial into the network and check the status before departure, find the gate number and send the user a return message.

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Agents insist that it will be years before Americans are comfortable with making arrangements solely by machine. And large companies may not want this kind of setup.

“People don’t want to spend money having employees playing around with their computers,” said Travis Tanner, chief executive at Carlson Wagonlit Travel, the nation’s second-largest travel group after American Express.

Still, Tanner concedes that agencies will have to become more efficient and offer a wider range of services to survive.

Carlson is pushing its customers toward arrangements in which corporations pay fees for transactions and any money remaining from air commissions would be returned to the company. Carlson’s added value will come from handling a company’s business expense reporting requirements and saving money by finding better deals.

“The small independent agent that just does air (tickets) will go extinct,” Tanner said.

Smaller agencies, he said, will have to find niches in packaging leisure travel tours or handling cruises and other high-margin business. Indeed, like all middlemen, they will have to focus carefully on how they can offer customers something extra that makes their service worth the extra cost.

“Agencies have no idea how quickly the market share could shift,” said Blakeley, the computer consultant. “It could change overnight.”

Glendale agent Abkion defiantly suggests closing up shop: “Let (the airlines) open their own ticket offices. See if they can make rental car and hotel reservations and make sure the frequent flier numbers are in the records. It’s not possible.”

In the end, however, she admits her agency will probably find ways to adapt by taking on more high-margin work handling cruises and other leisure packages: “It’s a high-pressure job, but you get hooked on it.”