NEW YORK - Two leading online travel agencies are countering United Airlines' decision to eliminate per-ticket sales commissions this week. <br>
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Travelocity.com Inc. added a $10 fee to all United fares late Thursday, while Expedia Inc. altered the Chicago-based carrier's displays on its Web site, leaving off prices and putting its routes at the bottom of the page. <br>
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The nation's other major airlines also phased out the commissions but were not similarly affected because they agreed to compensate Travelocity and Expedia in other ways. For example, a carrier might pay a bonus if the online agency can meet a certain sales target or boost the airline's overall market share on that site. <br>
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``We have broad marketing agreements with numerous airlines and we receive compensation for our sales and marketing efforts,'' Travelocity spokesman Al Comeaux said Friday. <br>
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``Apparently, some airlines don't see the value that we provide to them,'' he added. <br>
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Neither United nor Expedia returned calls seeking comment. <br>
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The incentive-based payments airlines make to travel agents have become increasingly important as per-ticket commissions were eliminated over a period of seven years. Airline analysts estimated that the nation's largest carriers could save as much as $1 billion by dropping these commissions. <br>
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However, consumer advocates worry that the growing reliance on incentive-based commissions will lead travel agents to place the airlines' best interests ahead of their customers. <br>
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With travel demand down because of the soft economy and the impact of Sept. 11, online ticket distributors have lost significant business. Analysts said the action taken in response to United's move is indicative of just how tough times have become. <br>
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``The Web agencies are playing hardball with the airlines,'' said Henry Harteveldt, a San Francisco-based travel analyst for Forrester Research. <br>
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For example, ``Expedia is saying they're going to give the best shelf space to the companies that provide them with the best incentive,'' Harteveldt said. <br>
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The situation with United and the online agencies, which is the subject of negotiations between the parties, is not the first one. <br>
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Last March, Northwest Airlines said it would no longer pay commissions to online travel agencies, which it criticized for giving display biases. Travelocity responded by charging customers $10 extra for the Eagan, Minn.-based airline's tickets. <br>
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That ended last month when Northwest signed a ``distribution agreement'' with Travelocity in which the Fort Worth, Texas-based Internet distributor agreed to improve Northwest's displays on its site and, by extension, increase its market share. <br>
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Northwest's vice president of distribution, Al Lenza, described the deal as ``an incentive for them to be fair with us.'' He would not provide further details.
