<B> Inside Track</B>
<B>USTAR Prompts DOT To Consider Caps</B>
American, Delta and United have until Dec. 17 to file responses to complaints filed with thee Department of Transportation by the United States Travel Agent Registry over the international commission caps (<I>BTN,</I> Nov. 16). USTAR not only alleged discriminatory and unfair practices by the capping carriers, but also illustrated differences in the matching moves.
Delta, for example, added to United's initial policy change the requirement that the caps apply to Delta interline tickets as well as Delta-only flights. USTAR also claimed Continental violated DOT rules by "seeking to aggregate multiple one-way international ticket sales with a total commission maximum of $100. This effectively disincentivizes travel agents in the issuance of split tickets or multiple journey segmentation and may result in consumers not having access to certain international fares which would otherwise be available on separate tickets." USTAR president Bruce Bishins also may take action regarding Canadian Airlines' announcement, which was issued by partner American Airlines even though the two airlines do not have antitrust immunity for international travel outside North America.
<a name="2"><B>Airlines Face "Deteriorating" Fundamentals</B>
Signs that travel managers are tightening control over air expenses continue to trickle in, prompting one analyst to say the airline industry's fundamentals are "deteriorating." Susan Donofrio of BNT Alex Brown in New York said that although low fuel prices should keep profits aloft, her company is concerned about the earnings outlook due to a "serious deterioration in year-over-year monthly revenue per available seat mile performance."
RASM, as reported by the Air Transport Association, was down 3.1 percent in October, compared with increases of 4.6 percent in both of the previous two months. It was the largest monthly drop in yields since 1991, with the exception of aberrations such as the 1992 Value Pricing initiative.
Earlier, British Airways said premium class bookings were dropping due to tighter controls, and American Airlines cut back 1999 capacity growth (<I>BTN,</I> Nov. 16). Since then, United Airlines also said it would cut back next year's growth, acknowledging that more business travelers were booking cheaper, advance-purchase tickets rather than last-minute walk up fares.
<a name="3"><B>ARC Seeking Business With Other BSPs</B>
The Airlines Reporting Corp. is talking to other bank settlement plans around the world, looking to "centralize the efficiencies of the other 37 and have them buy service from ARC," said Barry Lemley. Meanwhile, at last month's Joint Advisory Board meeting, the six agencies and six carriers on the Board had only positive feedback to report on ARC's new corporate travel department designation. "Over time I think travel agencies have realized that this is not a threat to them," Lemley said. "Unless I'm reading it wrong, the Board will lift the cap on the number of CTDs" it will allow at its Dec. 8th meeting, and guessed that ARC will accredit 75 CTDs in 1999.
<a name="4"><B>Carlson Wagonlit Seeks Pricing Alternatives</B>
Like American Express (<I>BTN,</I> June 15), Carlson Wagonlit Travel has been negotiating bulk buying deals with both airlines and hotels, and it has been working with CRSs to manage the inventory. Vince Cook, vice president of worldwide distribution planning, said CWT also is looking at other pricing options, including flat fares, negotiated fares for connecting travel, consortia buying where "you bundle a number of clients together" and tiered pricing.
CWT also plans to expand the branded hotel product it launched last year in the United Kingdom with Jarvis International (<I>BTN,</I> July 28, 1997) to other destinations and to launch a branded car rental product early next year.
<a name="5"><B>ACTE Carries On About Carry-Ons</B>
The Association of Corporate Travel Executives last week blasted new carry-on luggage size restrictions imposed by Delta Air Lines and United Airlines. The two carriers have installed nine-inch deep, 14-inch wide, 22-inch high templates in X-ray security machines in some airports.
"There are actually two potential surprises for business travelers," said ACTE president Earl Foster. "The first is discovering that the garment bag--a virtual badge of the business traveler--may no longer qualify as carry-on luggage. The second is having to go back to the ticket counter or the curb to check in these bags." Foster argued the new policies are not being well-communicated and run contrary to conditioning business travelers have undergone as a result of poor baggage delivery service--namely, to keep essential items close at hand. Continental Airlines, which last month publicly objected to United's plans to install the templates in Denver, filed an injunction against Delta, seeking and sued for damages for interference with Continental's customers.