Agents Assail Southwest’s Fare Sale on Internet

Travel agents complained Wednesday that Southwest Airlines has “launched a sneak attack” with a sale on the Internet that doesn’t allow them to make commissions.

“Just as Sir Lancelot cuckolded King Arthur after pledging his allegiance, Herb Kelleher has turned on travel agents with this non-commissionable Internet sale despite his pledge to maintain 10% commissions,” said Drake Hiller, chief executive of Ace Travel House in Houston.

When other airlines reduced travel agent commissions in 1995 from 10% of the ticket price to a maximum of $50, Southwest Airlines took out full-page ads in many newspapers promising it wouldn’t reduce commissions until at least 2000.

Last month, United, American and Delta all capped commission rates for domestic ticketing at 8%, retaining a $50 cap for a round-trip fare. International commissions also fell to 8% from 10%, with no cap on payments. Southwest again said they would not reduce commissions to travel agents.

That allegiance resulted in many letters of praise from travel agents.

Beth Harbin, a spokeswoman for Dallas-based Southwest, said the fare sale, which runs through the end of the week for flights in and out of Houston, is designed for the person at home who wants to make their own travel plans.

Other airlines do pay commissions on bookings or ticketing by agencies on the Internet, although at a reduced rate of 5%, with a maximum of $25 round trip.

Travel agents have complained that caps eliminate jobs and reduce earnings. After the first cap, a class-action antitrust lawsuit alleging price fixing was filed on behalf of 33,000 travel agents.

In September 1996, American, Delta, Northwest and United agreed to pay $72 million in cash to settle the suit, while denying wrongdoing. Including separate settlements with TWA, US Airways and Continental, the amount grew to more than $86 million.