Thorunn Howatt
Northern News Services

Yellowknife (Nov 21/01) - Travel agents are being forced to find new ways to make money after airlines decided to cut down on ticketing commissions. The changes could impact the costs to travellers who are booking flights.

"The airlines are killing the travel business," said Nishi Khon Key West Travel owner, Don Yamkowy.

In the past, travel agencies made a large chunk of their revenue by booking airline tickets for customers. The airline would give the agency a percentage commission from the ticket price. About a year ago airlines reduced the percentage and later put a cap of $60 on the total amount the percentage could add up to.

"In the last 60 days the airlines reduced the $60 cap to $28. It's going down to zero," said Yamkowy. The move would hurt Northern agencies more than others because of the high total cost of airline tickets.

"Up North you fly a lot," he said.

This is a fundamental change in how travel agencies are going to have to operate. The change is shifting from the airline paying for the service of issuing and booking a ticket to the agency eating the cost or passing it on to the customer. "When the shift went to $60 most agencies added a $20 service fee," said Yamkowy. Since the last commission reduction to $28 many agencies are charging the traveller an additional $50 on top of the ticket price, said Yamkowy.

"Window shoppers" who are browsing holiday destinations will pay a deposit for Yamkowy's staff to investigate destinations.

"We are asking for a $100 deposit," he said. Travel agents accumulate telephone charges when they are searching potential destinations and it can be very time-consuming.

"For us to do the work we want to be compensated for it. It's to pay for the value of a travel agent."

But despite the added costs to travelling consumers, Yamkowy is positive the value is worth the price. The recent grounding of Canada 3000, caused by financial troubles, left many travellers stranded and with no way to retrieve the money paid out for tickets.

"If you booked on the Internet you're on your own," said Yamkowy.

Yamkowy said agents were busy re-arranging travel for customers who had booked through them while those who dealt directly with the company or on the Net were faced with only a telephone answering machine message and no recourse.

"In today's times I think you get a lot of value out of a travel agent," he said.

Airline commissions are not regulated.

"Commissions have been paid by airlines, hotels, car rentals, tour operators and so on to travel agents and retailers," said president of the Association of Canadian Travel Agents, Randy Williams.

"West Jet, for example, is at nine per cent, Southwest Airlines is at 12 per cent, Canada 3000 was at 10 per cent -- they just reduced from 12 and Air Canada is currently at five per cent commission. The Air Canada commission has a $28 limit on Canadian bookings.

Williams said 86 per cent of Canadian travel agencies are now charging a service fee. Of the other 14 per cent, 11 per cent are thinking about charging a service fee in the next three months.

"We anticipate that by the middle of next year, service fees will exist in at least 95 per cent of the agencies," said Williams.

Although there has been a lot of publicity around the impact of the Internet, only about five per cent of bookings are made online.

"People want someone they can complain to," said Yamkowy. The high cost of doing business in the air travel industry has forced airlines to make the move said First Air's director of sales and marketing, Michael Olson.

"Where do you cut your costs and how do you best serve your customers?" he said.

"Unfortunately it is passed on to the travel agents with commission cuts."