The move by United Airlines (UA) to transfer credit card merchant fee costs to selected U.S.-based travel agents, and inevitably to consumers, was condemned by the World Travel Agents Associations Alliance (WTAAA). WATTA urged individual agencies to immediately calculate the economic effects of UA’s policy on their operations.
WTAAA noted that United has informed the selected travel agents that, effective July 20, they will no longer be able to use United’s merchant facility to facilitate the sale of UA tickets, but instead must use their own merchant agreement facility. Why UA has decided to apply this policy to selected agents only remains a mystery to all concerned and has not been explained by United, WTAAA said.
“Globally with the exception of Australia and the United Kingdom, credit card merchant fee contracts prevent any merchant passing on additional fees to a consumer for the use of a credit card," said WTAAA Chair Mike Hatton. "Obviously United is aware of this contractual arrangement and is therefore passing those charges on to travel agents, as United knows that travel agents will then have no choice but to pass those charges on to consumers. In short this is nothing less than an airline ticket price increase in disguise, combined with a circumvention of credit card merchant facility contractual arrangements and a massive cost shift from the airline to consumers using the travel agent as the conduit. United appears to be unwilling to be upfront with consumers on this issue and to possibly incur consumer backlash given the current economic climate and the state of the airline industry at the present time.
“It will be interesting to see if any other airline will follow United's lead and incur both distribution system and consumer wrath” Hatton continued, “ and it will also be interesting to see what action credit card companies take in the face of this attempt to circumvent the terms of their merchant agreements and penalize their individual card holders”.
Hatton also said WTAAA would support the efforts of the American Society of Travel Agents (ASTA) and the Association of Canadian Travel Agencies (ACTA) to push back against this UA initiative. Such WTAAA support will include notifying all travel agents globally of United’s actions and also communication with credit card companies on a global basis.
“There is no doubt that each travel agent must conduct an immediate analysis of the impact of this policy on its business and decide how it will handle bookings involving United going forward," Hatton said. "Consumers too will make an individual decision as to whether they are prepared to pay an additional fee for the privilege of purchasing a United Airlines ticket using their personal credit card.” The WTAAA also urged United Airlines to reconsider its’ position in relation to their announcement concerning this matter.
WTAAA members include: ASTA; the Australian Federation of Travel Agents (AFTA); ACTA; the Association of South African Travel Agents (ASATA); the European Travel Agents and Tour Operators Associations (ECTAA); the Travel Agents Association of New Zealand (TAANZ): and the Travel Agents Federation of India (TAFI).