Most travelers are used to the fact that when airlines merge and competition goes down, airfares go up, especially in hub cities. But one significant potential fare increase often goes unnoticed with the mergers — the elimination or reduction of many consolidator and corporate discounts, as well as travel agent commissions.
The most recent examples are with British Airways, American and Iberia, which have received any trust immunity to sell like one airline; and United and Continental, which are effectively half-merged, albeit not with their upgrade policies.
Not surprisingly, with the British, American and Iberia situation, discounts are much less available in any market where the three overlap and/or dominate. This reduction in discounts is especially noticeable with flights from the USA to the U.K. and Spain.
With the United-Continental merger, discounts have affected markets in Latin America. Consolidators and other agents, I have talked to, indicate the discounts are now less than half what they were a few months ago.
Not surprisingly, Continental and United together dominate Mexico, Central America and much of South America.
In Europe, where Lufthansa is also part of United’s code-share equation, the differences are not as dramatic in terms of numbers, but some consolidators have told me of a new credit card surcharge that effectively adds four percent to the price to many tickets.
Agent commissions and corporate discounts may not mean much to most travelers, but when agents lose commission on international tickets, they have to charge higher fees to make a profit.
More importantly, when consolidators don’t have significant discounts, it’s much harder for travelers to find deals. Personally, I’ve found that with the new credit card fee to Europe for example, there’s no discount for the client whatsoever. If anything, consolidator fares end up being higher.
I’m not against making a profit. I believe the travel industry is better off with healthy airlines.Plus, there’s also no law saying airlines have to allow passengers to book through discounted channels. On the other hand, there are anti-trust and monopoly laws for a reason, if airlines are going to raise the effective cost of tickets, they should be upfront about it.
Janice Hough is a California-based travel agent a travel blogger and a part-time comedy writer. A frequent flier herself, she’s been doing battle with airlines, hotels, and other travel companies for over three decades. Besides writing for Travelers United, Janice has a humor blog at Leftcoastsportsbabe.com (Warning, the political and sports humor therein does not represent the views of anyone but herself.)
