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Air war brewing online
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October 20, 1998: 11:14 a.m. ET
Internet travel services claim they are being treated unfairly by air carriers
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NEW YORK (CNNfn) - Online travel services are complaining they are being treated unfairly by airlines, the U.S. Department of Transportation said Tuesday.
"We're looking into some complaints registered with us by the Interactive Travel Services Association," said a department spokesman. "They had some concerns, particularly lower commissions than ordinary travel agents."
Department and industry officials alike said that Internet travel companies earn lower commissions on each ticket sold than face-to-face agents. At the same time air carriers have kept the online agencies from providing the same range of services as their non-electronic colleagues.
With $312 million in annual revenue, Microsoft Corp.'s (MSFT) Expedia Web site is a jumbo player in the $911 million Internet travel industry. However, companies like it make only a 5 percent commission on transactions that would net a non-electronic travel service 8 percent.
In their defense, the airlines argue that online services have lower costs than traditional travel agents.
Southwest Airlines, for example, does not offer any commissions to online travel services because they do not qualify as travel agents in its eyes.
Major online companies - which also include Preview Travel Inc. and Internet Travel Network - feel the airlines are trying to starve out Web competition to their own corporate sites through such tactics as cutting costs or making it difficult for online customers to make reservations.
"We're looking at the concerns they raised," the spokesman said. "We're in the process of examining their concerns, but we haven't opened a formal investigation yet."
He said regulators would be looking into online services' concerns as part of a broader effort to set federal policy on computer reservation systems. 
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