Beginning Friday, airline customers using Sato Travel for official travel will pay a higher transaction fee when making ticket reservations in person or by phone, Army officials said Tuesday.
The rate adjustment, the second in six months, is intended to offset losses in revenue from the discontinuation of commissions paid to travel agents by the airlines, according to Installation Management Agency-Europe officials. The ticket commissions ranged from 5 percent to 9 percent per ticket. Over the last several months, most airline carriers in Europe have phased out the commissions, long a source of revenue for travel agents.
The transaction fee, however, is not assessed when people buy their airline tickets on the Web. It also doesn’t apply to train or bus tickets.
In October, the Commercial Travel Office, commonly known as Sato, instituted a $15 fee for each airline ticket purchased. That rate is now increasing from $15 to $49. However, officials have yet to determine if the higher rate will apply across the board.
“The government is fine with $49 on the official side. The leisure side is still being negotiated,” said Tyler Nemchick of the transportation branch in IMA’s logistics division.
In fiscal 2004 for the Army, Sato handled roughly 98,000 airline tickets for leisure travel and more than 164,000 for official travel.
The rates will remain in effect for 2005 while a new contract is negotiated later this year for 2006 and beyond. The new agreement would replace the existing five-year contract, though it may cover only three years, Nemchick said.
Currently, IMA-Europe and Sato are trying to reach an agreement on what the new transaction fee should be for leisure travel. Sato wanted $49, but the Army didn’t concur, said Donald Sanders, the European accounts manager for Sato.
“There will be an increase,” Sanders said. “We have to have it.”
