Rosenbluth Calls for Elimination of Air Commissions

Alex Wasilov, president and chief operating officer of Philadelphia-based mega travel management company Rosenbluth International, has issued a call to the airlines to eliminate all standard commissions paid to travel agencies on air ticket sales. He simultaneously called on the airlines to charge fees on all tickets issued directly by the airlines through direct telephonic and electronic reservations that fully reflect the costs of ticket distribution.
Hal Rosenbluth, the agency's chairman and CEO, said he expected support for this plan from fellow travel agencies and the American Society of Travel Agents, as well as airlines. "This industry is completely broken," he said. "In a time of chaos and confusion, now is the time to take bold steps. This is a way to fix part of the problem."
Rosenbluth also said that such a move would further legitimize transaction fees levied by agencies at the same time that it would provide airlines with a new revenue stream and help them to present more viable business plans when they go to apply for loan guarantees.

Managing director of distribution planning for Continental, Jim Young, was less than enthusiastic about the idea. "In rewarding you for loyalty, I won't charge you a fee," said Young, speaking at a conference in Philadelphia yesterday.

Rosenbluth also told BTN that a bill he had testified on in hearings last week was introduced on the U.S. Senate floor today. Bill S. 1578, the American Travel Industry Stabilization Act, would provide loan guarantees worth $5 billion to travel agencies. If the Senate approves the legislation, it will be sent to the House of Representatives for a vote. Rosenbluth said he did not expect that his agency would apply for such a loan, but noted that it is critical to the future of the airline industry that the distribution channel remain intact.