Hot Ticket: The Airlines' First-Class Problem

  • Large numbers of Hispanic passengers are nothing unusual on flights at Sky Harbor International Airport in Phoenix, Ariz. But there was something not quite right about the group of more than 100 Hispanics boarding Delta's Flight 1800, a red-eye to Atlanta, on Tuesday, Feb. 16. When the U.S. Immigration and Naturalization Service was brought in to investigate, sure enough, 102 of the 186 passengers were illegal aliens. Two days later, the INS checked another Phoenix flight, American Trans Air Flight 751 to Chicago. Of the 171 passengers aboard, 60 were illegals. Another ATA flight later that day turned up 29 more.

    The INS says all three groups were part of an organized ring smuggling illegal aliens into the U.S. Since February 1996 the agency has arrested more than 3,000 people at Sky Harbor. "This is a pretty enterprising group of individuals," says Virginia Kice, spokeswoman for the Western regional office of the INS. "Drug smuggling gets a lot more press. But the smuggling of human beings is a multibillion-dollar enterprise."

    That includes the use of stolen airline tickets. According to the INS, stolen tickets are part of a package deal, including phony IDs and Social Security cards, that smugglers provide to their clients. And for one person, Barbara Pisa, that news was vindication of sorts. For three years, ever since her Classic Travel Agency in Naperville, Ill., was one of 28 agencies in the suburbs west of Chicago hit by what police describe as a Colombian burglary ring, Pisa has waged a one-woman crusade to focus attention on what she and others say is a serious public-safety issue that the airlines have ignored. At all 28 agencies the take was the same: blank airline tickets--6,000 of them, worth $6 million on the black market.

    The Chicago break-ins were part of a nationwide crime wave that has victimized more than 600 agencies, netting perhaps 500,000 tickets worth hundreds of millions of dollars. And the crimes are continuing. A Marietta, Ga., agency was recently hit twice for 6,000 tickets. "It's organized crime, and it's big," says former Miami Metro Dade detective Gary Yallelus, who along with his partner, John Little, first identified the ring. In 1996 and '97 they arrested 10 people in connection with the thefts, including several of the Colombians and Rafael Horacio Fernandez, 51, a resident alien from Argentina living in San Bernardino, Calif., who was part of another team that printed and sold tickets.

    Travel agents are eager to get federal agents involved because once a ticket is used, the carrier can demand payment from the agency, even for stolen tickets. The agents say the airlines could thwart these crimes by using scanners capable of detecting tickets that have been reported stolen. Such technology would have enabled Hawaiian Airlines, for example, to intercept two passengers who flew from Honolulu to Maui last year with stolen first-class tickets on a plane that had no first-class section.

    The airlines reply that the scanners don't always catch the bogus tickets. But last week British Airlines--one airline that does scan--caught a man who was flying from Miami to London and trying to get a $26,000 refund for seven tickets. A scan revealed that four were stolen, part of a batch of 24,000 taken from Hudson Holidays in Elmwood Park, Ill., in December 1996. "It adds money laundering to the list of crimes the stolen tickets are being used for," says Little.

    Liability for stolen tickets is potentially fatal to travel agencies, which have already seen their commission payments cut by the airlines at the same time that the agencies' business is being eroded by customers using the Internet. "We don't have that kind of money. We're just going to go out of business," says Pisa, who got a letter from American Airlines demanding $16,000 for stolen tickets written on her ticket stock. The airline later relented because Pisa had followed recommended security guidelines. But Georgette Bouland-Anthe, a travel agent in Libertyville, Ill., who lost 6,000 blank tickets to the ring and owes the airlines $300,000, was forced to close her seven-year-old Travel Incentives Inc. "The airlines want payment," says Bouland-Anthe. "I am trying to get my nerves back in order after being in this business 20 years and having to walk away from it with nothing."

    Last month Pisa wrote Arizona Senator John McCain, a sponsor of an airline-passenger bill of rights, to tell him about the stolen plane tickets. Intrigued, McCain forwarded Pisa's letter to the Justice Department. It arrived just about the time the INS was arresting those illegals trying to fly out of Phoenix. Pisa's hope is that a Government Accounting Office report due out in June will recommend that the airlines be forced to scan tickets, thereby rendering stolen ticket stock worthless. For some travel agents, that will be a little too late.