The Company Shifts Credit Cards Fees For Some Travel Agencies

United Airlines stopped processing credit cards for thousands of travel agencies Monday in an effort to conserve cash. The airline is expected to report a $350 million dollar second-quarter loss this week.

The move means certain travel agencies will be required to process their own credit card transactions, and pass that cost on to the person buying the tickets. The fee is typically 3.5 percent, or $17.50 on a ticket costing $500.  United had traditionally absorbed those fees, but says it can no longer afford to do so in some cases.

Travel agents say the move by United is likely to be followed by other airlines. Chris Russo, president of the American Society of Travel Agents, told The New York Post that they saw that scenario play out when Delta  started cutting off commissions for travel agencies in the 1990s. It wasn't long before every carrier dropped commissions. More recently, the same has been true for things like baggage and seat selection fees.

The New York Post reports that the nation's 18,000 travel agencies sell about half of airline tickets. A UAL spokeswoman said the move would effect only a handful of the those companies.

FMI: www.ual.com, www.asta.org