United Airlines rescinded a policy that restricted access of some travel agencies to the United merchant account.
The carrier also waived retroactively any penalties that the agencies had accrued under the policy.
“We have elected to rescind a policy that required a relative handful of the thousands of travel agencies that sell tickets for United to pay their own credit card merchant fees,” United said in a statement.
“We will continue to focus on reducing distribution costs as we pursue product and service improvements that provide more value to all of our customers.”
The policy, adopted in June 2009, barred a number of agencies – initially 28 – from using the United merchant account for credit card sales of United tickets, effective the following month. A few other agencies were later added to the list.
Airlines typically act as the merchant when travel agencies sell their tickets.
When the American Society of Travel Agents became aware of United’s action, it sought assistance from several members of Congress persuaded them to sign a letter to United requesting a delay in imposing the policy. United agreed to the delay and never enforced the policy.
ASTA and the Business Travel Coalition applauded the reversal.
ASTA president Chris Russo believes that the rescinding of the policy came about due to an injection of Continental Airlines culture into the new United. The two carriers merged on Oct. 1.
Russo cited Dave Hilfman, senior vice president sales, and Mark Bergsrud, senior vice president of marketing, as emblematic of new leadership at United that is “great news for all travel agents.”
BTC hailed the “new era of collaboration” at United.
United’s intentions in formulating the policy were never clear.
Since the elimination of base travel agency commissions in 2002, airlines have focused on GDS fees and credit card fees as targets for reducing distribution costs.
Credit card fees have risen with the addition of loyalty prorams and various perks for cardholders.
Paul Ruden, senior vice president of legal and industry affairs at ASTA, was convinced that United was sending up a trial balloon to test whether any part of the credit card burden could be shifted.
But Jeff Foland, then United’s senior vice president of worldwide sales and distribution, said the action “was very limited in scope, confined to a small number of agencies.” He said the policy “in no way was intended to be a broad move in the marketplace.”
Even if United had no intention of broadening the policy, its action ignited fears that other carriers would take similar actions.
Given the airlines’ tendency to march in lockstep on distribution issues, the fear was not necessarily unfounded.
United said it would continue to seek ways to reduce distribution costs.