The Sept. 11 terrorist attacks in New York and Washington, D.C. and subsequent airline industry layoffs are creating ripple effects across all economic sectors in the San Fernando Valley along with the rest of the nation. Travel agencies, already reeling from cuts in airline commission fees, competition from online travel sites and a sagging economy, are feeling substantial aftershocks. And the actions of one local operator indicate a developing trend in consolidations as smaller mom-and-pop travel agencies grope for alternatives to simply closing their businesses and the larger agencies look for ways to cut costs. Joe McClure, owner of Montrose Travel in Glendale, said two local agencies have signed agreements to move their operations to his corporate offices. He is also planning to solicit other travel agents for the same reason, hoping to both provide space for them and cut down on his own overhead. At the same time he is looking for other agencies to share the pain, Montrose Travel is taking its own cost-cutting measures. McClure has cut his staff by 10 percent. Salaries for the remaining 150 employees were slashed by 10 percent until further notice, and he has stopped paying himself completely until he sees strong evidence of a turnaround. “These are drastic times and it’s time to batten down the hatches,” said McClure. “I predict 25 percent of the smaller agencies won’t be around at the new year, but Montrose Travel will definitely be one of the companies left standing amongst the rubble in January.” McClure said he has enough cash reserves to carry the business through March, adding that the average travel agency typically carries about a three-month reserve. Glendale-based Maxi Travel and Seavers & Seavers Travel in Pasadena will move their offices into Montrose Travel between Oct. 15 and Nov. 1, as will two independent contractors from a local competitor whom McClure declined to name. The operators will use Montrose Travel’s basic infrastructure, including computer systems and office machinery, in exchange for a percentage of their commissions. “We are simply going to absorb all of their operational costs and they will pay us a part of their commission fees,” said McClure. McClure said he’s calculated the four will generate between $4 million and $4.5 million worth of new business annually and bring him an additional $350,000 in annual commission fees. “That’s not so much a significant amount for our company, but this isn’t about our survival, it’s about the survival of those agents who have been in business most of their working lives,” said McClure. Verena Palmstrom, owner of the 20-year-old Maxi Travel, confirmed she is closing her business and she and her two independent operators would be joining forces with Montrose Travel, but was reticent about details. “What can we do? The bigger ones are eating the smaller ones,” Palmstrom said. According to McClure, commission fees at his agency dropped by about 83 percent immediately following the terrorist attacks. He said they have managed to climb back up to nearly 79 percent of normal levels a surprise even to him. McClure said, “I thought we were going to be hovering at about between 20 and 50 percent decline in commissions for the next three months.” But many of the smaller agencies are still waiting for that kind of recovery, and even McClure said it was difficult to predict how long it would be before business returns for them. Even the relatively quick recovery for Montrose Travel, coupled with the consolidations, hasn’t stopped him from implementing a restructuring plan of his own. McClure, who appeared on a KCET-TV business forum last month to discuss the industry fallout from the attacks, suggested then that if the airlines get a financial bailout from the federal government, some of it ought to be used to raise agents’ fees. Early last week representatives for the Arlington, Va.-based American Society of Travel Agents (ASTA) went to Washington D.C. to ask for an assessment of their industry and for lawmakers to consider aid.