AA Paper Ticket Surcharge Rumor Draws Buyer Reaction

<B>AA Paper Ticket Surcharge Rumor Draws Buyer Reaction</B>

By David Jonas

American Airlines still is not commenting on printed reports suggesting it will tack on a $10 surcharge on all paper tickets effective today, but travel managers already have voiced mixed feelings.

An overriding concern is the lack of electronic ticket interlining, which would enable travelers to move from one carrier to another on multi-airline itineraries or in the event of delays and cancellations. Paper ticket interlining is widely available, allows for more complicated trips and protects travelers from problems during re-accommodation procedures.

The idea of airlines charging extra for tickets that cost more for them to issue is not new. Delta Air Lines made waves two years ago when it levied a $1 per segment fee for bookings made everywhere but on its own Web site (BTN, Jan. 25, 1999). Though most competitors did not match and Delta was compelled to rescind the surcharge, the move indicated a desire to nudge consumers to cheaper distribution models.

Alaska Airlines, meanwhile, a leader in new-age distribution development, has maintained its $10 fee for mailing paper tickets to customers, a policy on the books for a few years. A spokesman said the fee, applicable to any itinerary where an electronic ticket is available, covers express mail costs. "The electronic ticket is the key to everything while the paper ticket exists only for the airlines' benefit," he said. "The interline question is a good one, however, and we are focused on that."

Until e-ticket interlining is more widespread, travel managers will remain opposed to paper ticket surcharges. Currently, such interlining arrangements in the United States only exist bilaterally between Continental Airlines and both Northwest Airlines and America West Airlines. A few international partners also have developed those systems.

"There has to be flexibility here. Until total e-ticket interline capability is up and running, there will be times when paper tickets will be the only smart way to go," said Dan Baillie, travel manager at Block Drug, Jersey City, N.J. "Cost cutting is fine, but the airlines should focus their attention on renewing the faith of their customers--both corporations and the actual 'butts in the seat'--prior to trying to pull this rabbit out of their hat." Baillie suggested that airlines negotiate e-ticket usage into their corporate accounts and include clauses for mitigating circumstances.

Airlines, in fact, have considered that possibility, but none have yet to acknowledge that it is part of any current contracts (BTN, Oct. 12, 1998).

Another travel manager at a company with overall T&E expenditures in the hundreds of millions, said such surcharges are another example "of the airlines nickel and diming us to death," and the impact on his company would "be in the millions."

A further complication is the current state of airline labor relationships, which has prompted many to rely on the protection of paper tickets. "If your airline happens to strike, it can be very difficult to go to another carrier and request a seat on the next available flight if you are holding an electronic ticket," said Robert L. Darbelnet, president and CEO of AAA. "The technological communication among the airlines simply does not yet exist." Some buyers, however, said they were not opposed to paper ticket surcharges--at least not on domestic routes--as they would help companies mandate e-tickets.

At press time, it was unclear if American would go ahead and levy the extra charge, and if so, to what degree. Would it apply to tickets booked only by American itself, or also by travel agencies? Would it be withheld from bookings that are not eligible for e-tickets?

In any case, United Airlines president Rono Dutta refused to comment on the carrier possibly following American's lead. Northwest, too, is watching and waiting, and has not made a decision.