United Airlines is in news for its decision to “make some travel agents pay the credit card fees on flights that they book”.

Published: 02 Jul 2009

United Airlines is in news for its decision to “make some travel agents pay the credit card fees on flights that they book”.

The airline told an unspecified number of travel agents that starting July 20, they will no longer be able to access its 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, reported USA Today.

In the notice, a United vice president told the agencies to report the sale to the airline as a cash transaction. He warned that agencies that try to assign the credit-card processing fee to United’s account would be dinged $75 per ticket.

Credit card companies typically charge merchants between 2 percent and 3 percent of the transaction amount per card swipe.

“Credit-card processing costs are escalating at a high rate and represent several hundred million dollars each year,” said United spokeswoman Robin Urbanski. “We’re exploring ways in the current economic environment to reduce our costs and run an efficient airline.”

United spent $710 million last year on distribution costs, which includes payments to the distribution systems such as Galileo, reported The AP.