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United cuts commissions
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September 19, 1997: 7:26 a.m. ET
Carrier limits fees to 8 percent and a maximum of $50 per domestic flight
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NEW YORK (CNNfn) - United Airlines on Friday said it is cutting commissions to travel agents to 8 percent to save as much as $100 million a year.
It isn't clear whether other airlines will follow United's cutback. However, airlines often copy pricing and commission actions from one another, particularly if the action is perceived as a competitive advantage.
The changes take effect Saturday and apply to flights with the United States, Puerto Rico, the U.S. Virgin Islands and Canada, United said.
As part of the reductions, United capped agent fees to $50 per round trip domestic fare. Commissions on international travel will also be 8 percent, but have no maximum payout.
The airline hopes to save $80 million to $100 million annually and remain competitive, it said.
"It will allow United to more effectively thrive in an increasinly competitive airline marketplace," said Gerald Greenwald, chief executive officer.
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United Airlines
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