American Ends Offshore Booking Commissions

American Airlines announced today that, effective Oct. 1, it no longer will pay commissions on tickets issued outside the United States and Canada for flights originating within the U.S. and Canada. The move is the lastest salvo fired by several major carriers to shoot down a controversial technique used by some agencies to regain base commissions on domestic flights by booking U.S. segments through overseas locations.

American's announcement echoes statements issued in late May by Delta, US Airways and Northwest voicing their dissapproval of commissions paid to U.S. agencies on domestic segments booked overseas. In the final week of May, Delta came out the strongest against offshore booking, threatening not only to recoup commissions paid on these bookings, but to end its relationship with any agency that defied its decree: "We reserve the right to collect any amount of inappropriately retained base commissions and terminate the Delta ticketing authority," of agents who participate in offshore bookling, it said in a statement sent to agencies.

American's action follows that of Northwest Airlines which eliminated commissions for foreign agents on tickets for travel that originates outside the country of sale at the beginning of last month. The change was made "to ensure the integrity of each country's commission policy and to prevent malpractice," according to Northwest.

Meanwhile, a US Airways spokesperson said that the airline's position on offshore booking is that it is "not permitted." US Airways has posted this ruling on the GDSs and is reinforcing this message in its sales calls to agencies.