United Airlines Makes More Cuts

July 7, 2008

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United Airlines has stopped paying travel agencies for booking some tickets. It's one more way the airline is trying to offset fuel costs.

Over the past decade, the relationship between airlines and travel agencies has dwindled. Now, Chicago-based United Airlines is chopping some of the commission they reward to companies. But U.S. editor for Airline Business magazine David Field says an airline offering incentives to an agency is rare these days.

FIELD: Travel agencies have gone down in number enormously, simply because of the net and the fact that the airlines have cut commissions. And cheap tickets simply don't have the economics for anyone, and that's why it's getting much more expensive for people to fly.

Field says the cutbacks might have some impact on a handful of agencies. But he says most profit from vacation packages and car rentals rather than flights. United estimates it will save $100 million from the action.