Travel agents allege airline collusion in demise of commissions

David Kravets

Thursday, April 10, 2003 | 9:38 a.m.

SAN FRANCISCO -- Dozens of travel agents filed a lawsuit against major air carriers on Wednesday accusing them of violating antitrust laws by colluding to eliminate commissions on ticket sales.

The complaint, filed in U.S. District Court in San Francisco, alleges that 21 airlines conspired to ban commissions to travel agents who sell tickets for the carriers.

"They cannot agree to constrain trade together," said plaintiff's attorney Joseph Alioto.

He said the industry, beginning in 1997, reduced 10 percent commissions to 8 percent. Two years ago commissions dropped to 5 percent of the ticket price and in March 2002 many airlines eliminated commissions.

A similar suit, which has class-action status, is pending in a federal court in Wilmington, N.C. The carriers include Alaska Airlines, Delta Air Lines and United Airlines. The companies have denied the accusations.

The 49 plaintiffs in the San Francisco suit opted out of the North Carolina class action.

The Air Transport Association, an industry trade group, said it has not seen the California suit and declined comment, spokeswoman Diana Cronan said.

Sylvia Sparks, owner of Bonanza World Travel in Carson City, Nev., is among the plaintiffs. Sparks said she's had to lay off two employees and has passed on her $25 minimum commission fees to travelers.

Cynthia Prosterman, of Tam Travel in Corte Madera, said she also laid off two employees.

"The loss to the business has been incredible," she said.