AIRLINE FEE CAPS STOKE ASTA ADS, SUIT THREAT

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The American Society of Travel Agents last week launched its first salvo in response to a cap airlines placed on ticket commissions.

Page ads broke in Feb. 24 editions of USA Today and The Wall Street Journal supporting a consumer awareness campaign in response to the cap imposed by Delta Air Lines, and followed by USAir, United, American and Northwest. The ads position travel agents as taking "the hassles out of your travel planning."

The Alexandria, Va.-based travel agents group created the ads in-house, and Aviso Public Relations & Marketing, Alameda, Calif., handled placement. Aviso is also helping identify 20 cities for local print runs. In addition, ASTA is working with communications consultancy E. James White Co., Herndon, Va.

The three-month ad and publicity campaign is ASTA's first step, said Nancy Gravatt, VP-public relations and consumer marketing. However, she said, the "biggest action we're taking is legal action." ASTA plans an antitrust suit alleging the major airlines fixed prices by capping commissions.

The organization is also appealing to the U.S. Department of Transportation for a cease-and-desist order and to the Department of Justice for a restraining order against the caps.

ASTA's claims of price-fixing are "totally without merit," said Clay McConnell, manager-corporate communications at Delta.

In October, Delta said it would cut commissions on international tickets to 8% from 10% of the fare. On Feb. 9, Delta announced plans to immediately cap commissions on domestic tickets at $50 for round-trip and $25 for one-way travel. Ms. Gravatt said for some agencies, the cap would affect upward of "40% of their revenue income in terms of dollars."

Airlines contend the move is a cost cutting measure and not an effort to bypass travel agencies. Agencies write about 80% of Delta tickets, Mr. McConnell said.

Further, commissions from tickets costing more than $500 often subsidize travel agencies' other, less profitable operations, including writing tickets for other travel services, Mr. McConnell said.

"We can't afford to subsidize other transactions anymore," he said. "We simply have to reduce our costs in order to survive and be a competitive force."

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