TRAVEL AGENTS OF AMERICA 

PREAMBLE: Travel agents provide a valuable service to millions of American citizens who travel, both in offering advice and counsel during the purchasing phase of travel planning, but also in servicing travelers whose trips have been interrupted due to weather, airline flight interruption, family emergencies, and especially in the event of a national emergency similar to that which occurred September 11, 2001. No inanimate airline website nor even the thousands of airline reservations agents, many of whom have since been laid off, could service the tens of thousands of stranded travelers who were suddenly impacted by the events of September 11, 2001. But the over 200,000 travel agents of America were able to help not only their own customers, but also many of the customers of the airline websites and overloaded airline reservations centers whose only source for immediate assistance was a professional travel agent. The purpose of this bill is to recognize the valuable role that travel agents play in providing millions of Americans with professional travel services each year, to identify and correct those market imbalances that, since the phased implementation of the Airline Deregulation Act of 1978, have been allowed to creep into the air travel marketplace and now threaten the very existence of the travel agent industry, and to clarify the role that the travel agent industry and its over 200,000 members can play in helping the nation's beleaguered airline industry to return to much needed profitability by helping the airlines to reduce a significant portion of their fixed overhead expenses and thus reduce the airline industry's likelihood of having to request additional taxpayer bailout.

1. CREATE A FAIR AND LEVEL PLAYING FIELD FOR ALL RETAIL MERCHANTS OF AIR FARES TO THE PUBLIC, WHETHER SAID MERCHANTS OF AIR FARES BE DIVISIONS OF AIRLINE(S), SUBSIDIARIES OF AIRLINE(S), PARTNERS WITH AIRLINE(S), OR ACTING AS INDEPENDENT AGENTS OF THE AIRLINE(S) SUCH AS RETAIL TRAVEL AGENTS.
   1. ELIMINATE AIR FARE PRICE DISCRIMINATION IN THE MARKETPLACE BY PROVIDING CONSUMERS WITH ACCESS TO ALL AIR FARES THROUGH ALL DISTRIBUTION CHANNELS: Presently, the airlines offer air fares over their individually owned web sites and on their jointly developed and jointly owned web site, ORBITZ, that are often hundreds of dollars lower (20% lower or more) than air fares offered to travel agencies via the Computer Reservations Systems. This is a violation of the Clayton Antitrust Act of 1914, wherein Section 2 so states: "That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities which different commodities are sold for use, consumption, or resale within the United States or any…other place under the jurisdiction of the United States, where the effect of such discrimination may be to substantially lesson competition or tend to create a monopoly in any line of commerce…." The effect of this one issue has had perhaps the greatest adverse impact on damaging the travel agency distribution system in America, and thus lessoning competition, since one of the key roles of a travel agent is to offer unbiased advise and counsel to consumers in making an intelligent purchasing decision, based in large part on ticket price. Therein lies the reason airlines have used this anticompetitive tactic with increasingly bold regularity since the advent of airline booking web sites in 1997. Travel agencies want their customers to have a choice when purchasing airline tickets. The airlines do not. But it is quite natural for one supplier of any product to take steps to discourage or impede the availability of a competitor's product to the consumer. That's why there is a Federal Trade Commission and numerous federal laws which are enforced against the natural tendencies of price discrimination in the marketplace. One such law is the Robinson-Patman Act of 1936 which was enforced successfully against the Great Atlantic and Pacific Tea Company in 1948 when they were required to stop influencing price discrimination by suppliers against small mom-and-pop grocery stores. We should not be surprised when multiple suppliers are permitted to collude in the pricing and distribution of their product to consumers that problems of price discrimination arise. This provision of this bill will correct what lack of enforcement thus far has failed to correct.
   2. PROHIBIT THOSE DEBIT MEMOS THAT PENALIZE TRAVEL AGENTS FOR CERTAIN TICKETING PRACTICES THAT THE AIRLINES PERMIT CONSUMERS TO ENGAGE IN DIRECTLY WITH THE AIRLINES WITH NO PENALTY TO THE CONSUMER. Specifically, Back to Back and Hidden City Tickets should not result in debit memos to travel agents, so long as airline reservations agents or internet based reservations systems such as Orbitz or individual airline websites are permitted to issue these same type tickets without penalty for consumers who deal direct with the airline.
   
   
2. ESTABLISH A FAIR AND EQUITABLE AIRLINE TRAVEL AGENCY COMPENSATION PLAN, AND ELIMINATE PREDATORY RECALLING OF AGENCY INCOME BY THE AIRLINES.
   1. ESTABLISH A FAIR FIXED RATE OF PAY FOR ALL AIRLINE TICKET SALES BY TRAVEL AGENCIES. For example, even an 8% uncapped commission on both domestic and international airline tickets would represent a 20% reduction from pre-1995 pay levels, and a return to pre-1978 levels of pay, at much lower ticket prices for excursion fares but at higher ticket prices for business fares. A fixed rate of commissioned compensation, whatever the rate so long as it is fair, also reintroduces the sales motivation back into the air travel sales process for the nations' primary travel distribution system, a key element for the airlines especially at a time when airline travel is at a severely depressed level. Of critical interest to the airlines is the fact that a commissioned sales staff is cost-free when there are no sales, unlike the fixed overhead of a salaried airline reservations staff with thousands of employees with employee benefits, office space, etc. whose overhead is constant, even in times of deeply depressed sales.
   2. PROHIBIT ALL RECALL COMMISSIONS: Eliminates one of the most punitive and predatory tools that airlines frequently use against travel agents, by prohibiting the recalling of any commission, whether in whole or in part, from any travel agency who sells an airline ticket in good faith and within the ticketing rules of the airline as controlled by the airline Computer Reservation System. Eliminates a frequent practice of airlines of switching tickets issued by travel agencies for tickets reissued by airline ticket agents, and then recalling the original commission paid to the travel agency under threat of losing their right to issue any future tickets on that particular airline. Now, regardless of the reason for reissuing a ticket, no airline will be authorized to recall the original commission, which was paid to the travel agency who made the initial sale and who performed the initial work of making the reservation and issuing the ticket. The airlines own reservations agents are not forced to give up some of their compensation just because a passenger later changed their mind or because another ticket agent reissued the ticket for whatever reason. It should be of particular note to lawmakers that while income lost by airlines during the airline shutdown was refunded in large part through federal taxpayer grants, these same airlines that accepted the taxpayer bailout for their lost revenue are now recalling travel agent commission income that agents once earned for trips cancelled during the airline shutdown. This is having a devastating impact on small mom-and-pop travel agencies nationwide.
3. CALLS FOR THE BREAKUP OF THE AIRLINE OLIGOPOLY IN THE UNITED STATES, WITH SPECIFIC STEPS TO BE TAKEN THAT TOGETHER WILL CONTRIBUTE TO A MORE OPEN AND CONSUMER DRIVEN MARKETPLACE:
   1. CALLS FOR THE DIVESTITURE OF THE FOLLOWING AIRLINE OWNED AND/OR CONTROLLED ELEMENTS OF THE AIRLINE OLIGOPOLY: Travel Agent Computer Reservations Systems, the Airline Reporting Corporation, the joint airline owned website ORBITZ, with a deadline of no later than 12/31/2002 for complete divestiture.
   2. CALLS FOR THE RETURN OF AIRLINE-RELATED PUBLIC DOMAIN ASSETS SUCH AS TAKE-OFF AND LANDING SLOTS AND TERMINAL GATES TO THE CONTROL OF TAXPAYERS: Return all airport assets originally funded with taxpayer dollars such as airport take-off and landing slots and terminal gates to the public domain, by prohibiting the leasing or control by the airlines of any such facilities in a manner that lessons competition in any airport in favor of a monopoly hub airline. Require all take-off and landing slots to be placed up for bid at least every three years. Prohibit the underutilization of terminal gates by any airline, especially by a monopoly hub airline, or any airline controlling more than 40% of the gates or slots at any one airport.
   3. PROTECT THE PRIVACY OF AGENCY SALES AND CUSTOMER PURCHASING INFORMATION: Prohibits either the Computer Reservations Systems or the Airline Reporting Corporation from selling or otherwise providing any information to the airlines concerning a specific travel agency's customer sales information. Only authorizes a specific airline to obtain airline sales information, absent customer data, on city-pair sales, ticket volume, and dollar sales data on that specific airline only, not on any competing airline or airlines. Eliminates the practice of dominant airlines in hub cities from using travel agent customer data obtained from one of the airline controlled elements of the airline oligopoly to apply additional pressure on travel agencies to switch passengers to the already dominant hub airline.
   4. ELIMINATE ALL PREDATORY AND PUNITIVE PROVISIONS OF COMPUTER RESERVATIONS SYSTEM (CRS) CONTRACTS: Provides for the elimination of all punitive and predatory CRS contracts that penalize travel agencies for failure to sell airline tickets for airlines who withhold the lowest air fares from travel agencies by only making them available on the airline web sites that, when ticketed, does not count toward the contractually dictated productivity level. Also provides for the renegotiation of all CRS contracts within six months of passage of this bill, with no penalty for time remaining on existing contracts.
   5. REDEFINE THE ROLE OF TRAVEL AGENTS AS BEING AGENTS OF CONSUMERS, NOT THE AIRLINES, AND REMOVE FEDERAL PREEMPTION FROM THE AIRLINES: Redefines the role of travel agents as being the primary agent of the consumer in the purchasing decision for airline tickets, and likewise lifts federal preemption from the airlines thus making state courts available to both consumers and travel agents in resolving disputes with airlines.