[Congressional Record Volume 145, Number 99 (Wednesday, July 14, 1999)]
[Senate]
[Pages S8505-S8506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BURNS:
  S. 1362. A bill to establish a commission to study the airline 
industry and to recommend policies to ensure consumer information and 
choice; to the Committee on Commerce, Science, and Transportation.

[[Page S8506]]

                        travel agent commissions

  Mr. BURNS. Mr. President, I rise today to introduce a bill that will 
establish a commission to study the future of the travel agent industry 
and determine the consumer impact of airline interaction with travel 
agents.
  Since the Airline Deregulation Act of 1978 was enacted, major 
airlines have controlled pricing and distribution policies of our 
nation's domestic air transportation system. Over the past four years, 
the airlines have reduced airline commissions to travel agents in an 
competitive effort to reduce costs.
  I am concerned the impact of today's business interaction between 
airlines and travel agents may be a driving force that will force many 
travel agents out of business. Combined with the competitive emergence 
of Internet services, these practices may be harming an industry that 
employs over 250,000 Americans.
  This bill will explore these concerns through the establishment of a 
commission to objectively review the emerging trends in the airline 
ticket distribution system. Among airline consumers there is a growing 
concern that the airlines may be using their market power to unfairly 
limit how airline tickets are distributed.
  Mr. President, if we lose our travel agents, we lose a competitive 
component to affordable air fare. Travel agents provide a much needed 
service and without, the consumer is the loser.
  The current use of independent travel agencies as the predominate 
method to distribute tickets ensures an efficient and unbiased source 
of information for air travel. Before deregulation, travel agents 
handled only about 40 percent of the airline ticket distribution 
system. Since deregulation, the complexity of the ticket pricing system 
created the need for travel agents resulting in travel agents handling 
nearly 90 percent of transactions.
  Therefore, the travel agent system has proven to be a key factor to 
the success of airline deregulation. I'm afraid, however, that the 
demise of the independent travel agent would be a factor of 
deregulation's failure if the major airlines succeed in dominating the 
ticket distribution system.
  Travel agents and other independent distributors comprise a 
considerable portion of the small business sector in the United States. 
There are 33,000 travel agencies employing over 250,000 people. Women 
or minorities own over 50 percent of travel agencies.
  The assault on travel agents has been fierce. Since 1995, commissions 
have been reduced by 30 percent, 14 percent for domestic travel alone 
in 1998. Since 1995, travel agent commissions have been reduced from an 
average of 10.8 percent to 6.9 percent in 1998. Travel agencies are 
failing in record numbers.
  Mr. President, I think it is important to study this issue as well as 
the related issues of the current state of ticket distribution 
channels, the importance of an independent system on small, regional, 
start-up carriers, and the role of the Internet.
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