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.”
