Two US airlines have slashed their sales commissions given to local travel agencies and a third plans to follow suit.

American Airlines cut their commissions by 50 percent from February 1 and Continental made a similar reduction from February 16.

US Airways is due to make an even bigger cut of 70 percent, effective April 1.

C-Travel owner Carl Paiva said the moves would have a negative impact on Bermuda travel agencies.

"Because the airlines are effectively monopolies, they have been able to come right in and make this huge hit," Mr. Paiva said yesterday.

"They are foreign entities operating in Bermuda and this revenue will go straight out of Bermuda and not support Bermuda jobs."

The airlines' move would not be seriously damaging for C-Travel, Mr. Paiva added, because its business model was not heavily reliant on airline sales.

"We are looking at ways to increase our leisure side, an area where we are already strong," Mr. Paiva added.

"We are hoping to make up the difference from the lower commissions through more online sales, as we are bringing in improved online products."

Cheryl Hayward Chew, president of Meyer-Franklin Travel, said: "The reduction in the commission being paid by the airlines to travel agencies is disappointing, because travel agencies offer a significant source of expertise and assistance to the travelling public. However the news doesn't come as a surprise.

"At Meyer-Franklin Travel, our business plans have anticipated this trend. Like any business that intends to succeed in the marketplace, we have to focus on what our customers want and need.

"The travel agency customer of the future will be one who puts a premium on their own time and who values the customer service and travel expertise provided by a professional agent.

She added that customers would not benefit in the form of a lower fare. "The fares being offered by American and Continental match the fares being offered by Meyer-Franklin Travel," Ms Hayward Chew added.

A spokeswoman for American Airlines said in an e-mailed statement: "American made this decision because, like all public corporations, it has an obligation to reduce costs and maximise shareholder value where it can."

A spokesman for Continental Airlines said: "Continental Airlines values it's agency partners. This was strictly a move to lower distribution costs at a time when the airline industry is under significant cost pressure."