Chris Russo, ASTA president, sends a letter to David Myrick, vice president of sales for the Americas at United Airlines, asking that United rescind its new policy of not accepting credit cards from agents. Here is the letter in its entirety.
Dear Mr. Myrick,
Several of our members have received letters indicating that United has
terminated their right to accept credit cards as agents of United. We ask that
you rescind this policy immediately. A few points suffice to show that this
new policy is both unjust and commercially unfeasible.
While there is a fairness issue at hand, there are many technical and
administrative issues that make United’s Merchant Access program impossible. First, over 63 percent of travel agents’ access to merchant services is
limited to the Airlines Reporting Corporation’s (ARC) Travel Agent Service
Fee (TASF) program, and this program is designed to process service fees, not
airline tickets. ARC has a US$500 limit on transactions processed through the
Second, United is requiring these agents to absorb United’s cost of doing
business. The travel agent is an “agent” and is not the provider of the
transportation services to the customer. By acting as the credit card merchant
and identifying the agent as the provider of the service on customers’ credit
card statements, you are asking agents to absorb the risk of credit card
chargebacks related to United’s service performance. Agents already bear the
credit costs of charging their service fees. It is not reasonable to expect them to bear your costs, too.
Third, United will save no credit costs if the result of the policy is that
consumers, or agents on behalf of consumers, book on credit cards at
United.com. This suggests the real purpose of this policy [is] to drive agents
away from GDSs to less-efficient booking processes so United can avoid GDS
Fourth, travel agents have been given insufficient time to prepare their systems and procedures to accommodate a process change of this magnitude. Many agents have back office, mid-office, front office, and consumer-facing booking tools that must be reprogrammed to accommodate such a change. Current online booking tools do not have automatic controls that allow an agent to refuse a certain airline’s booking based on the form of payment or to automatically charge a customer’s credit card as a merchant for an individual airline. Agents would need several months, or more, to have their systems reprogrammed and redesigned to accommodate such a change.
Fifth, travel agents’ cost of doing business will increase well beyond the agent absorbing the credit card merchant fees that United will avoid. Agents’ ARC bonds will increase, as agents’ cash sales, presumably, will go up. However, I point out, and believe you know this too, that doing cash sales on a significant volume of business in today’s world is not feasible for most agencies.
Finally, consumers will be disadvantaged as costs shifted from United to
travel agents will ultimately be borne by consumers in the form of higher
service fees on top of the existing fare level. History shows that fares will not be reduced to reflect the claimed savings in credit costs.
We, therefore, ask that United immediately rescind this policy, which is unfair
and commercially unreasonable.