Can Agents Save United?

BTC president suggests ailing airline should court travel sellers

By: Jerry Chandler

Could the salvation of United Airlines lie in a liaison with travel agents? The Business Travel Coalition thinks so.

In an open letter to United CEO Glenn Tilton, Kevin Mitchell, the coalition president, outlined a trio of initiatives that the organization believes could help the nation’s second largest carrier emerge from Chapter 11.

Topping the list is marshaling travel agent support, support that’s been markedly absent from the Friendly Skies for some time.

United’s aggressive commission cutting has “all but destroyed its relationship with the vast majority of travel agency community participants,” Mitchell said. He maintained that UA could recover the support of “this entrepreneurial sales force” with financial incentives.

He also suggested meetings with agent industry organizations.

How likely is it that Tilton will pay any attention to Mitchell’s ideas?

The BTC chief said Tilton used a hand-held e-mail device to reply within an hour of receiving the letter. And Tilton then e-mailed a second time later the same day.

Mitchell said the United executive promised to discuss the suggestions with the UAL Strategy Team. He also noted that Tilton is not a United insider he was vice chairman of ChevronTexaco Corp. before joining the airline Sept. 2. United would not make any formal comment. As a matter of policy, the airline declines to discuss its dealings with travel agents.

Mitchell said Tilton would do well to meet immediately with top representatives of the American Society of Travel Agents (ASTA) and the Association of Retail Travel Agents (ARTA), something that both organizations appear to favor.

“Travel agent backing was instrumental in both Continental’s and America West’s emergence from Chapter 11. United would be well advised to follow in their steps,” said Richard Copland, ASTA president and CEO.

Pat Funk, ARTA vice president, agreed. “Now, more than ever, United needs friendly relations with its primary sales force.”

But should United decide to work with travel agents again, Mitchell cautioned, it needs to communicate clearly that the arrangement isn’t temporary. If UA says, “We need you now, but we’ll dock you in a year-and-a-half,” the whole strategy could backfire, he said.

Airlines, including United, have been getting pressure from their pilots to change ticket distribution.

In his “state of the union” remarks at a recent meeting of the Air Line Pilots Association, Capt. Duane Woerth, the union president, attacked the airlines’ recent strategy

The carriers, he said, believed they could “slash travel agent commissions and lay off thousands of employee reservationists and thereby reduce distribution costs by 3 to 5 percent.”

Airlines “have surrendered much of the control of their distribution system to consumers,” particularly through the Internet, Woerth said. “A significant portion of the loss in revenue can be attributed to this distribution debacle.”