Southwest To End Agency Commissions

Southwest Airlines today announced that on Dec. 15 it will eliminate all traditional travel agency commissions, becoming the last major U.S. carrier to do so. The airline, which said only 15 percent of its third-quarter reservations came through the traditional travel agency channel, until that date will continue paying 5 percent, uncapped commissions across the board. Sabre is the only global distribution system in which Southwest participates.

"We waited this long to make the change in our commission policy to give all agencies--large and small--ample time to shift their business model to the industry norm of fee-based services," said Southwest CEO Jim Parker, noting the change will save the airline $40 million annually. Southwest added that 55 percent of all revenues now are generated via online channels.

Southwest, meanwhile, today reported a third-quarter net profit of $106 million, a 40 percent increase over last year, representing the carrier's 50th consecutive profitable quarter.