United Airlines Passes Credit Card Fees on to Travel Agents
Monday, August 3rd, 2009
Travel agents across the country are up in arms about the recent decision by United Airlines to pass along its credit card processing fees to the middle man. Over 28 travel agencies across the United States will be incurring a cost that equates to up to 3% per airline ticket to cover the cost of credit card processing fees. Previously, this cost was paid by the airline as part of the booking process, but now the travel agent will be responsible for paying this extra surcharge per transaction.
Experts point out that this decision will likely encourage travel agents to book United Airlines tickets online since prices may be similar or lower, and there will not be an extra fee imposed for processing the transaction. According to a recent article in Business Week, "Fee Fight: United Airlines vs. Travel Agents", United's position is that the agent is no longer serving as an intermediary for booking the sale, but as a vendor that is responsible for managing the booking process.
Card issuers such as Visa, American Express and MasterCard impose such fees for airline ticket sales in the event that the airline does not actually provide for the flight. Most travel agents simply would not be able to shoulder this type of responsibility, especially if they were booking corporate flights or pricey, international flights on a regular basis.
At this time, no other airline has decided to follow in United's footsteps, so travel agents may still elect to work with other carriers if they felt that the responsibility of paying extra fees was too much to bear from a financial standpoint. Still, it's an industry shift that may affect thousands of independent travel agents and agencies at a grand scale in the months ahead. Consumers may benefit from booking travel on their own using online websites, or turning to alternative airlines entirely.