A lawsuit alleging that major airlines conspired to fix commissions
and thus drive independent travel agents out of business, has
picked up dramatic momentum.
In the wake of Senior U.S. Judge W. Earl Britt’s ruling that the
suit now has class action status (News, Sept. 23), major airlines
last week filed papers challenging damages agents say they’ve
suffered as a result of a series of seven commission cuts and caps
over recent years.
The carriers claim the plaintiff’s numbers are wrong because
they’re using ARC data that does not include override commissions.
Further, the airlines contend they’ve paid out more in overrides
since 1997 than agents lost as a result of commission cuts and
The class action ruling may be the most significant development
yet in the three-year-old lawsuit. In it, Judge Britt concluded
that the “plaintiffs have made a threshold showing that a
conspiracy to cut, cap or eliminate travel agents’ base
commissions, if proven, would have had a common impact for members
of that proposed class.”
“Now, the airlines have a problem,” said Al Anolik, the San
Francisco-based attorney representing ARTA, one of the plaintiffs
in the suit. “Had the court not certified that we were
representative of everybody, then we couldn’t have gone ahead with
the suit. It would not have been economically feasible.”
The suit would have remained one in which four travel agents and
ARTA would take on what amounted to most of this country’s airline
industry. Now, the seeds of the suit planted by North Carolina
travel agent Sarah Hall in 1999 appear to have the potential of
bearing fruit. That’s because all travel agents in the country are
represented in the action.
When Judge Britt certified the action as representing a class of
people, Anolik indicated the carriers started to take things far
more seriously. Their reaction, he said, was to try to put agents
on the defensive as far as damages are concerned arguing that
commission overrides paid since 1997 more than made up for base
When ARTA first got word of the airlines’ assertion, “We picked
ourselves off the floor from laughing so hard,” said Pat Funk, the
association’s vice president of operations. “It just shows that
these guys haven’t got a clue.
“More than 55% of the agencies in this country never receive an
override commission. Never,” Funk said. “Yeah, the airlines are
paying overrides and even some up-front commissions. But they’re
paying them to the big agencies.”
Repeated attempts by TravelAge West, to contact airline
attorneys, or to get them to go on the record about the suit in
general and the overrides vs. base commissions issue in particular
were unsuccessful. One attorney, Gary J. Rickner of Ward &
Smith in New Bern, N.C., said he couldn’t comment because, “We’re
still in litigation.” Rickner is the local representative for
Northwest Airlines in the suit. The action is being adjudicated in
the U.S. District Court, Eastern District of North Carolina,
ARTA asked its members, ASTA, agency consortia and franchisers
“everybody we [could] think of,” said ARTA President John Hawks to
fax its attorneys specific financial information to “refute the
In a communique labeled “Urgent,” ARTA asked agents to answer
the following questions:
" For any and all calendar years that you have records (starting
with 2002 and working backward, or as many years as you can go),
what did you earn in total compensation from the airlines?
" For each of those years, what did you earn in base commissions
from the airlines?
" For each of those years, what did you earn in overrides from
" For each of those years, what did you earn in other types of
pay and benefits from the airlines (e.g., free tickets AD75s,
" Have you seen any important increases in overrides or other
types of pay and benefits (but not base commissions) from the
airlines in the last few months?
ARTA requested that the information be sent to attorneys no
later than Oct. 15.
For now, preparations for what could prove to be a climactic
confrontation between this country’s travel agents and its major
The trial is set for April 28, 2003. And although a specific
dollar amount that agents could receive should they prevail has yet
to be determined, ARTA attorney Anolik said it could be “in the