Travel Travel agencies adding fees
NNSL (OCT 16/96) - NWT travel agencies have had to re-think the way they do business and consumers will have to pay more with the change.

At the beginning of September, Canada's major airlines put a cap on the commissions they pay to travel agencies for issuing airline tickets. The airlines are hoping to save millions with the move.

That meant the agencies had to come up with a plan to recover the lost revenue.

"The average agency was going to lose about one-third of its income," said Evelyn Nind, part owner of Marlin Travel. "That's why agencies have put service fees in place."

While the change affects travel agents across the country, it hits harder in the NWT and other jurisdictions where airfares are more expensive than average, because the new cap is much lower the old commissions on expensive tickets.

For example, southern agencies sell few tickets worth $1,000 or more, Nind said. In the North, however, tickets over $1,000 are almost the norm.

Now, instead of earning $82.50 on that $1,000 ticket, agencies earn $60, or three-quarters of what they used to earn.

Effective Sept. 1, Canadian North and NWT Air parent companies said the 8.25 per cent commission was replaced with a flat fee of $60 per ticket.

On tickets under $666, a nine per cent commission is paid by the airlines.

"That will take $120,000 to $130,000 in revenues out of our pockets," said Jim Eirikson, a partner in YZF Corporate Travel Ltd. "It's having the same impact on every agency in the North."

To balance the change, agencies have added service fees of $20 to $25 to make up for the lost revenue.

So for every ticket an agency issues for NWT Air or Canadian North, they'll tag on the extra charge.

"Our service to the customer was really paid by the airline," Nind said. "To pay the rent and the salaries, we have to charge service fees. It's an enormous change for everybody."

Eirikson said most people have accepted the change.

"We've been pleased with the response of our traditional clientele," he said.