STOCK QUOTES     More market data...

Airline's ticket fees may nudge customers to Web sites

By Jewel Gopwani
Knight Ridder Newspapers

E-mail this article Print this article Search archive Most read articles Most e-mailed articles

Yesterday, Northwest Airlines announced a $5 fee for booking through its call centers and a $10 fee for booking at ticket counters. Both fees are to start Friday.

The fees, which are expected to save Northwest $70 million, come at a time when major carriers post millions in losses, lose market share to low-fare or start-

up airlines, face rising fuel costs and grapple with seeking union concessions.

Airlines traditionally use fare increases when they suffer financially, but the competition from the low-cost carriers has actually resulted in the opposite trend: Fares are coming down. But the fee increases could be a more painless way to help buoy airlines' finances. As of late yesterday, no other airlines had followed suit.

Northwest's fees, which also include a new cost passed along to travel agents, are intended to make Northwest's cost structure look more like such discount carriers as Southwest Airlines and Jet Blue Airways. Discount airlines tend to book more of their tickets through their Web sites than the Eagan, Minn.-based company, which books 16 percent of its tickets online, Northwest officials said.

"I think the real root of the issue is competition in the air business, and the profitable, sustainable carriers today are low-cost carriers who really have a different distribution model than Northwest. We have to be able to compete with them on a comparable cost basis," said Al Lenza, Northwest's vice president of distribution and e-commerce.

Union officials say the fees will make fewer want to book tickets through call centers or at airport counters, making more of those jobs unnecessary.

"They're trying to push the public toward technology as much as they can, to eliminate not necessarily just union jobs, but well-paying jobs in general," said Stephen Gordon, president of Local 141 of the International Association of Machinists and Aerospace Workers. Gordon pointed to the airline shuttering its Livonia, Mich., call center, which employed 570 people, about 370 of which found jobs with other Northwest call centers.

But Northwest officials yesterday said they don't see the fee affecting staffing at airport counters, because about 2 percent of its tickets are booked there. The impact on call centers is undetermined, said Tim Griffin, Northwest's executive vice president of marketing and distribution. "The customer is going to decide," he said.

Bloomfield Hills, Mich., resident Mitch Bonnett, 60, said he's not surprised by the announcement. He has been booking online for at least three years.
 
But that's not the case for his father-in-law Val Corradi, 81, of Bloomfield Hills.

"I'm not that facile on the Internet," he said. "I can do much better with a telephone or with my travel agent."

And travel agents won't be happy with the new fees, either.

Northwest will also pass on part of a fee to travel agents that the airline pays for its flights to be listed on reservation systems that agents use to book tickets, like Sabre Travel Network.

The company pays an average of $12.50 per ticket to be listed on reservation systems. Starting Sept. 1, Northwest will bill travel agents for a portion of that cost: $3.75 for one-way tickets and $7.50 for round-trip tickets for domestic travel.

Company officials say the move will make it easier for the airline to compete with the discount carriers that don't use reservation systems.

But one analyst said the move could backfire.

"It will, if anything, give travel agents an incentive not to use Northwest," said Kevin Schorr, research director with Campbell-Hill Aviation Group, based in Alexandria, Va.