By August 29, 2004 Read More →

Smoothe Move Northwest!

Last time you walked into a bank to deposit your paycheck, were you charged extra because you dealt with a person instead of an ATM?

When you bought a magazine at the bookstore, were you slapped with a “service fee” because you purchased from an employee instead of its Web site?

No, of course not.

But that’s not true if you’re booking a ticket on Northwest Airlines.

Starting next month, it’s going to cost you an extra $5 if you call Northwest. If you book through an agency, you’ll pay a $7.50 surcharge, and if you go to the airport, the markup will be $10.

The absurdity of this move is both frightening and at the same time, funny.

It’s frightening because there are millions of people out there without Internet access or credit cards. These folks are now going to be penalized for doing business with Northwest since they will be forced to deal with a travel agency or a Northwest employee face-to-face.

It’s also frightening because air travelers are now faced with a sneaky fare increase and a possible reduction of choices.

No agency will ticket Northwest at a loss – remember, an agency is making no money from selling you the ticket now. There’s no way they’ll absorb this fee as a cost of doing business, so it won’t offer Northwest as a flight option.

Can’t your agent just use Northwest’s Web site?

Not really. If I book a ticket on Northwest’s site as your travel agent, I also lose all control of your record. And you lose the ability to interface with my agencies’ 24-hour services, management reports or back-office accounting programs. If I book on Northwest’s site, I also have to “dual-entry” every ticket, reducing productivity and increasing the possibility of agent errors.

I’ll probably have to raise my fees as a result.

Northwest’s decision is funny, too. Funny, because it’s so ridiculous. First, Northwest caps its commissions, then it eliminates them. And – let me get this straight – now it wants me to pay it to sell its tickets?

I can’t think of any other business that forces its distributors to pay for the privilege of selling its product. Not one.

I’m surprised that Northwest’s unions are not up in arms. This is a clear indication that the airline is trying to eliminate jobs by shifting its bookings to the Web. Indeed, if the masses flock online to Northwest, there is no longer a need to staff the call centers and ticket desks at the airports.

And what if Northwest’s Web site can’t handle the spike in traffic that this action is bound to stimulate? The airline hasn’t addressed that question yet.

Needless to say, this is a huge mistake for Northwest and it very well may put them on the heels of the other bankrupt carriers. Sabre (one of the major Global Distribution Systems for ticketing) has renounced its efforts and considers the airline in breach of contract. As a result, Sabre will no longer share some information with them – and information is critical when you’re selling airline tickets.

These are uncertain times, with carriers on the verge of bankruptcy or liquidation. The balance is easily upset. I’m afraid Northwest has tilted its distribution system against itself.

I hope that the others don’t follow, because it will set a bad precedent for every other business model that trades both online and in the real world.

Online sales were designed to be a cost savings over traditional models, not a replacement. Certainly, no one should be punished because of a desire to transact with someone who is professional, knowledgeable, fluent in English, friendly, and able to provide customer service.

So when the fax from Northwest Airlines arrived in our “in” box a few mornings ago with its unfortunate announcement, we did what we had to do.

We stopped selling Northwest Airlines tickets.

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