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Travel agents plan to sue airlines


Ending a low profile that angered many of its members, the American Society of Travel Agents announced yesterday it would soon file an antitrust suit and pursue other legal and legislative action to force the airlines to restore the 10 percent commissions that they once paid agents for ticket sales.

To put further pressure on the domestic airlines, the society said at a news conference in Washington that it would seek legislation to allow foreign airlines to carry passengers from one city in the United States to another.

It said that opening the domestic air-travel market to foreign carriers would keep airline ticket prices low "and assure that the airlines act like the competitors they claim to be."

Jeanne Epping, the society's president and chief executive, denounced the decision two weeks ago by most domestic airlines to limit the commissions they pay travel agents, calling the move "an unlawful conspiracy."

The society also will seek a restraining order from the Justice Department, Mrs. Epping said, to halt the caps until the lawsuit and questions of possible collusion by the airlines could be resolved.

And, the society said, it would seek a cease-and-desist order against the airlines from the Department of Transportation, arguing that they had engaged in unfair practices and unfair methods of competition under the Federal Aviation Act.

Society officials will meet with the Small Business Administration to seek low-interest loans for members, an estimated 20 percent to 30 percent of whom the society says will be damaged or forced out of business by the commission cap.

The airlines took issue with the moves by the agents' society. "There's absolutely no merit to the charges in the suit," said Todd Clay, a spokesman for Delta Air Lines. "The charges are totally without merit."

Delta was the first airline to impose the commission cap, informing agents on Feb. 9 that it would no longer pay a 10 percent commission on domestic fares. Instead, it began paying a maximum of $50 for all domestic tickets.

Delta's move, soon matched by the other major U.S. airlines, was described by company officials as part of its effort to lower cumulative operating costs by $2 billion by mid-1997. In pursuit of its savings goal, Mr. Clay said, the carrier had already eliminated 10,000 jobs and expected to trim more.

For a time, after imposing the cap, the airlines seemed to have the upper hand, and still may have, according to some travel industry officials, because the percentage of travel agent income from airline commissions has been falling in recent years. This is mostly because low-cost airlines have forced down domestic fares, depressing commissions across the board.

But after several days of inaction, the travel agent industry -- which is still dominated by small, independent agencies, despite a recent trend toward consolidation -- reacted with rallies, marches and demonstrations. Most of the anger was directed at the carriers, but some was aimed at society leaders for not denouncing the commission cap sooner.

"We did take a little long to deliberate," Mrs. Epping acknowledged in a telephone interview yesterday, "but that was because we called in experts to advise us about the implications, and we asked members to tell us how the cap would affect them."

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