United set to make select agents pay for card transactions

United Airlines has created a furore in the local travel industry by quietly distributing letters to select agencies informing them that agents would be paying the cost of credit card transactions from July end.

On the 19th of June, United Airlines sent out memos to an unknown number of travel agencies through the United States informing them that from the 20th of July the travel agents, and not United, would be footing the bill for any credit card transactions.

It is unknown why this was not a blanket mandate, with some agents still to be given access to the United payment channel, while others have been ordered to report the transactions as “cash” and that trying to assign the costs associated with the ticket to United will result in a fine.

This has angered the industry, with agents alarmed that they will be slugged with changes between two to three percent of each transaction.

“Credit-card processing costs are escalating at a high rate and represent several hundred million dollars each year,” said a United Airlines spokesperson to Associated Press in defence of the airline.

“We’re exploring ways in the current economic environment to reduce our costs and run an efficient airline.”

The travel industry fears not only will costs be passed onto the consumer, and make the shop-front agencies even less competitive, but also that this type of move will encourage other airlines to do the same, and as such set new precedents.

Already the American Society of Travel Agents (ASTA) has filed an official complaint with United Airlines, and has asked them to back down from its new stance.

Additionally, ASTA has filed a submission with the United States Department of Justice asking them to watch carefully and see if other airlines move to enact the same methods and scrutinise any possible collusion.