Originally created 08/25/04

Northwest imposes fees to tickets not booked on its Web sites



MINNEAPOLIS -- Northwest Airlines Corp. plans to begin charging customers and travel agents extra fees for domestic tickets that are not booked through the airline's Web sites.

The airline said Tuesday the new fees will lower the airline's cost of selling all tickets to about $5, or the same as it now spends selling them through the Web sites, http://www.nwa.com and http://www.worldagentdirect.com.

The changes will save the airline about $70 million annually, bringing Northwest's distribution costs in line with those of low-cost carriers such as JetBlue, Southwest Airlines and Independence Air, said Tim Griffin, Northwest's executive vice president of marketing and distribution.

Those low-cost carriers sell most of their tickets through their own Web sites, Griffin said.

"The profitable, sustainable carriers today are low-cost carriers," Griffin said. "Since we compete with low-cost carriers on price, it is essential that we compete with them on distribution costs."

The new fees apply to customers booking through reservation centers, at the airport or with travel agents who use global distribution systems. It will be up to the travel agent whether that cost is passed on to the consumer, Eagan-based Northwest said.

Global distribution systems - the major ones are Worldspan, Sabre, Galileo and Amadeus - list the fares of competing airlines from lowest to highest so travel agents can quickly determine price differences.

Griffin declined to comment on what Northwest might do if other major carriers don't institute similar fees.

"It's obvious they're trying to discourage GDS as a source of booking. The GDS's are the only true, honest source of airfares," said Terry Trippler, a consumer advocate in Minneapolis with the Internet travel search engine sidestep.com. "If all airlines start going in that direction, we're losing consumer choice."

Northwest, however, said customers will be able to compare prices through Orbitz, an unbiased Web site that has signed up for worldagentdirect.com. An estimated 8,000 travel agents also have signed up for worldagentdirect.com, Northwest said.

Although online retailers Travelocity and Expedia haven't yet signed up for worldagentdirect.com, Northwest said it is holding talks to add other Internet sites.

About 3 percent of agent bookings now come through worldagentdirect.com and about 16 percent of Northwest's tickets are booked through nwa.com, the airline said.

"If you want free, free is available," Griffin said. "If you prefer a higher level of service, we have that for you."

Beginning Sept. 1, Northwest will bill travel agents who use global distribution systems $7.50 of the average $12.50 cost charged Northwest by the GDS for each roundtrip domestic ticket.

Northwest said it paid about $180 million in GDS fees in 2003.

Beginning Friday, Northwest also will charge $5 for each domestic ticket issued through Northwest reservations offices in the United States and $10 for each domestic ticket issued through Northwest's airport locations in the United States and Canada.

The charges will be nonrefundable and also will apply to frequent-flier award tickets, Northwest said.

The new charges apply to tickets for travel within the 50 states and will not apply to tickets that are reissued, Northwest said.

Also Tuesday, UAL Corp.'s United Airlines said it's adding a $15 fee for booking frequent-flier trips by telephone.

Passengers of the airline can avoid the fee, which takes effect Oct. 15, by using the company's Web site to reserve seats with their frequent-flier miles. Those who fly more than 100,000 miles each year won't be affected, nor will those who call to use miles for upgrades.

United also announced Monday that it is reducing the amount of frequent-flier miles customers need to obtain free economy-class tickets to 15,000 from 25,000 on most nonstop flights of 750 miles or less. First- and business-class passengers will now need 30,000 miles instead of 40,000.

On the Net:

www.nwa.com

www.united.com