I know that this headline sounds nonsensical. But this is what Delta is proposing in its comments to the pending DOT proposed rulemaking. Delta feels that access to extra airline fees should be negotiated with and sold to the giant computer systems that power mom-and-pop travel agents, giant agencies like American Express and online travel agencies like Travelocity, Expedia, Priceline, Orbitz etc.
This is amazing.
Delta wants their designated ticket agents to pay them in order to get the full price of an airline ticket so that these travel agents can then sell tickets to the traveling public.
Delta executives have dropped down the rabbit hole into some sort of Alice in Wonderland economic system where up is down and down is up.
This is like having Wal-Mart, Target, CVS and Walgreens pay Coca-Cola for the right to sell their products or paying Kimberly-Clark to sell Kleenex.
Wait a second.
These retailers all make money and hopefully a profit selling the companies’ product. Kinda like travel agents make something from selling airline tickets. In a normal economic system, manufacturers pay the stores a commission or sell products at a “wholesale price” which is them marked up.
This is called a distribution system. In most economic transactions, the service provider prices their product then passes that cost onto their distribution system which then marks up the price to cover their costs. Each element makes a profit on their transaction. The service provider (the airlines) make money. The travel agent makes money (normally through a commission or override). The consumer pays for the right to fly.
Every product in America has a distribution cost. However, airlines are trying to make distribution a profit center rather than a cost.
How about keeping it simple for consumers — airlines should reveal all airfares and all ancillary fees at the same time and allow passengers to know the total cost of travel up-front so that they can compare prices between different airlines. Pricing information is the grease that makes the free market system work.
That is simple. That is how the free market should work.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
