Agents: DOT Plan on Display of Ancillary Fees Is Positive Step

by Michele McDonald

Travel agents generally support the Transportation Department’s move to require airlines to disclose basic fees through all sales channels early in the ticket purchasing process.

They also want the airlines to make the sale of ancillary products available in the GDSs.

But agents aren’t holding their breaths. Issued last month, the DOT’s Notice of Proposed Rulemaking, titled "Transparency of Airline Ancillary Fees and Other Consumer Protection Issues" has a long road to travel before it’s through.

“It sounds good, but practically speaking, there is always a compromise,” Goran Gligorovic, executive vice president of Omega World Travel in Fairfax, Va., said.

Joe McClure, president of Montrose (Calif.) Travel, agreed. “Everything takes longer than the DOT expects,” he said. “This will go through several gyrations. It can’t move forward in the form it is in today.”

Two options proposed
Both form and function are problematic.

Despite its name, the DOT’s proposed rulemaking does not propose a rule. Rather, it suggests two options: (1) to require the disclosure in all sales channels of basic ancillary fees (for first and second checked bag, carry-on bags and advance seat selection), or (2) to require disclosure only in sales channels that sell directly to the public, thereby excluding GDSs.

The DOT also seeks comment on whether sales transactions of ancillary fees should be enabled in GDSs, an idea that skates close to the edge of airline-GDS commercial relationships.

The right direction
Marc Casto, president and chief operating officer of Casto Travel in San Jose, Calif., said he is “cautiously optimistic” that certain core principles are finally being acknowledged, most importantly that a “central repository” exists where ancillary transactions can and should take place.

“I’m inclined to believe that the DOT is moving in the right direction,” he said.

It’s complicated . . .
The DOT also proposed that ticket agents be required to provide either “itinerary-specific” fees for anonymous shoppers or “customer-specific” fees for those who provide their frequent flyer numbers and status.

But, as McClure pointed out, “the seating part is very complex.”

For example, some airlines waive fees for customers with tier status: A “silver” customer may be entitled to a “preferred” seat, which can mean different things on different airlines, while a “gold” customer might be entitled to a premium economy seat on domestic flights and a discounted premium economy seat on international flights. Higher-level customers may be entitled to free premium economy seats on all itineraries.

. . . and difficult
Gligorovic doesn’t think a requirement to disclose customer-specific fees is workable.

“I would need to load all these profiles on every site,” he said. That would include “all the sites that Kayak scans. It’s easy to say, but practically it’s very difficult.”

If such a rule were imposed, he said, airlines might decide it’s easier to abandon such marketing techniques – a move that would not please frequent flyers.  

Customer service requirements
The DOT also proposed requiring “large” travel agents to adopt minimum customer service standards, an idea that caught Casto by surprise.

For one thing, there is “no overriding interest” that has said such a requirement is necessary, he said. For another, “every large agency already has customer service standards. This is a solution looking for a problem.”

Casto called the DOT’s definition of “large agencies” – those with sales of more than $100 million a year – a “very arbitrary line in the sand.”

And McClure asked, “Who is going to validate the $100 million?”

Disclosure of incentives
Gligorovic was less concerned about the service level idea than he was about the DOT’s proposal that agents be required to disclose incentives they receive from airlines.

Most incentives have disappeared, he said, and the few that are left on international services “are not even worth talking about.” But, he added, “It’s really nobody’s business.”

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