Continental Caps Online Booking Commissions

Following a significant spike in reservations made online due to the American Airlines post-strike sale, Continental Airlines last week announced an online commission cap that matches the one imposed by Northwest last year (BTN, Oct. 7, 1996).

Effective Feb. 24, Continental is paying 5 percent commissions with a minimum of $2.50 one way and $5 round trip, a domestic maximum of $12.50 and $25 round trip, and an international maximum of $20 one way and $40 round trip on all Internet or online services booked and/or ticketed.

The airline said the decision was not a result of the increase in bookings. "We consider this compensation to be more closely aligned with the transaction-based nature of the Internet and online service environment," Continental said in a message to travel agents.

Industry sources were not surprised by the announcement. In fact, some said they are expecting United Airlines to make the same move soon. Calls placed to the distribution department at United were not returned.

According to Continental's staff vice president of national sales, Dave Hilfman, "This is no big news to most people. This is a standard policy, and we could deviate for corporate customers, though we haven't come into such a situation yet."

These types of bookings still represent under one percent of Continental's total.

Meanwhile, several online services reported increased usage and dollar figures due to the American Airlines sale. American reported a fourfold increase in usage of its AAccess Internet booking site. In addition, American said there are now more than 550,000 subscribers to its NetSAAver e-mail.

Microsoft's four-month-old Expedia Internet travel service sold more than $1 million in travel tickets the week of Feb. 17, its best ever. In addition, visits to Preview Travel's Website that same week more than doubled following fare wars, compared with figures from a week earlier. New customer registrations were up 60 percent, and sales reached record highs, according to the company.

Internet Travel Network reported that it logged well over a million accesses to its site on Feb. 17.

San Diego-based CIC Research said the online travel population rose by 12 million between the first and fourth quarters of 1996, a 34 percent increase.