United: Travel agents must pay credit card fees on flights sold

— -- Consumer advocates and trade group representatives are alarmed by United Airlines' decision to make some travel agents pay the credit card fees on flights that they book.

They fear that the travel agency industry, and ultimately consumers, will have to shoulder hundreds of millions of dollars in additional costs if other carriers follow United's lead.

United told an unspecified number of travel agents that starting July 20, they will no longer be able to access the airline's merchant agreements with credit card companies such as Visa, MasterCard and American Express.

That means agents must set up their own agreements and pay the fees, usually around 2%, that credit card companies charge merchants for every sale.

If those agents continue to use United's merchant agreements, they will be charged $75 per ticket.

"Credit card processing costs are escalating at a high rate," says United spokeswoman Robin Urbanski, noting that United's distribution costs, which include credit card fees, totaled $710 million last year. "We're continuing to explore ways in the current economic environment to reduce our costs and run an efficient airline."

Urbanski would not say how many agencies were contacted or what criteria were used.

"The concern is this gets matched, and it becomes a new industry policy," affecting all travel agencies, from independent shops to large online enterprises such as Expedia, says Kevin Mitchell, chairman of the Business Travel Coalition.

The American Society of Travel Agents has sent a letter to United asking it to reverse its action. And on Monday the group filed a letter with the Department of Justice requesting that it be vigilant in making sure several airlines are not colluding to shift costs, in violation of antitrust laws.

Even in the era of do-it-yourself online booking, 50% to 60% of airline bookings continue to be done by travel agents, says Paul Ruden, the organization's senior vice president for legal and industry affairs.