Summary: The U.S. airline industry has gone from record losses during the early 1990s to record profits in recent years. Airline cost cutting and sustained growth in traffic have contributed to this rapid turnaround. Travel agencies, the primary channel for selling airline tickets, have not been immune from airline's cost-cutting efforts. Commissions paid to travel agencies are the fourth largest expense for airlines--after labor, fuel, and the cost of airlines. As a result, Airlines have cut commissions and set up Internet sites to sell more tickets themselves. Some travel agency representatives and consumer groups have questioned whether airlines are trying to drive travel agencies out of business, thereby depriving consumers of an important source of comparative price and schedule information. This report answers the following questions: How have changes in the way airlines sell tickets affected travel agencies and consumers? What are airlines' policies and practices for the sale and use of airline tickets sold by travel agencies compared with the sale and use of tickets sold directly by airlines? What are airlines' policies and practices for making their airfares, particularly discount fares, accessible to travel agencies and consumers? What are airlines' policies and practices regarding the use of data on travel agency sales?
