America West Airlines may have played follow-the-leader with other major carriers by elmininating travel agency commissions, but a recent move to alter its pricing structure puts it ahead of the game when it comes to controlling the costs of corporate travel.
While American Airlines recently increased its advance purchase requirements for lower-priced business fares from three to seven days (and other major airlines followed suit, at least in some markets), AWA eliminated Saturday night stay requirements and rejiggered its pricing structure into four categories: walk-up, three-day advance purchase, seven-day advance purchase, and 14-day advance purchase. This could bring fares down as much as 50 percent, analysts say.
It didn’t stay with the pack long on the agency commission cuts, either. Shortly after it announced it was eliminating the commissions, AWA turned around and instituted what it calls Agency AWArds, a pay-for-performance program that categorizes agencies based on their actual market share performance. For example, agencies that sell greater than 12 points above AWA’s expected share performance receive a 5 percent commission, which may not be as good as the old system from a travel agency standpoint, but it is a pretty good bone to throw them in these lean times.