Response to DOT’s Proposed Rules Falls Along Predictable Lines
by Michele McDonald /Responses to the Department of Transportation’s (DOT) third set of proposed consumer protection rules fell—for the most part—along predictable lines.
Groups representing travel agencies and GDSs support a mandate to provide all ticket agents with basic ancillary fee information while those representing or working with airlines maintain that work is already under way to achieve the DOT’s goals.
The rulemaking defines “basic” fees as first and second checked bag fees, carry-on bag fees and advance seat selection fees.
ASTA’s take
ASTA, along with several travel agencies that submitted comments, said the Notice of Proposed Rulemaking (NPRM), titled “Transparency of Airline Ancillary Fees and Other Consumer Protection Issues,” does not go far enough.
They said the DOT should require airlines to enable ticket agents to sell airlines’ ancillary products.
“The only realistic way that the government can assure that the airlines will open the door to independent distribution of the array of ancillary services and fees they have developed is to order them to do so,” ASTA said.
“A directive to this effect from DOT can reasonably be expected to have immediate and significantly positive effects on the ability of consumers to see, understand and purchase ancillary services at the same time and in the same transaction through which they buy the airfare.”
Immediate action
ASTA is keen to make “transactability” happen in short order. It wants the DOT to separate the ancillary issue from the others addressed in the NPRM and act upon it immediately.
The Travel Technology Association agreed.
The DOT should expand the scope of the rule to cover boarding services and cancellation and change fees, it added.
Open Allies for Airfare Transparency made similar recommendations and added, “The ancillary fee problem plainly has not and will not be cured by the market.”
“Airlines generally appear to lack any commercial incentive to provide to the neutral travel agency channel ancillary fee information, apparently believing that their interests are best served by making the all-in price of air travel look less expensive than it actually is and by not allowing ticket agents to show the full cost of travel at the shopping stage.”
Some dissent
Not all agencies are on board with a mandate, however.
In its comments, Carlson Wagonlit Travel said it agrees with the regulatory impact assessment recommendation that the DOT take “an incremental approach, one that will protect consumers while allowing carriers, GDSs and travel agencies to develop a private industry-based solution that limits the risk of undue government interference in the marketplace.”
AAA said that “imposing specific mandates in this area may be premature at this time.”
“Airlines should continue working with global distribution systems to reach an agreement on sharing proprietary fee information so that travel agents and online travel agencies can access the same ancillary displays and booking opportunities available today on an airline’s website.”
Role of NDC
Opponents of the mandate said the industry-based solution is already in the works in the form of IATA’s New Distribution Capability (NDC).
MasFlight, an aviation big data warehouse and analytics platform, said NDC “will address many of the concerns raised by the DOT in this rulemaking” and will include transparency for ancillary services and total price.
Jim Davidson, chief executive officer of Farelogix, said times have changed since the DOT first took up the issue of fees. He warned that a mandate could impede the progress being made.
“Back in 2010, Farelogix was concerned that any regulatory action would provide significant leverage to the GDS negotiations with the airlines, tipping the negotiating scales and forcing the filing of ancillaries through the industry fare-filing solution,” Davidson said.
Airlines and GDSs were in the midst of negotiating new contracts, and some airlines had been withholding ancillaries as a negotiating point.
“That is no longer the case,” Davidson said. “Most, if not all, airline-GDS agreements have been renewed and most, if not all, have already agreed to provide ancillaries to the GDS.
“The issue of airlines withholding ancillaries is no longer present.”
Foreclosing new technologies
If airlines were forced to enable ancillary sales through GDSs within a set time frame, they would have to resort to using legacy technology, rather than new technologies currently in development, according to Davidson.
Some ancillary products, such as seat selection, are designed to be dynamic, with the price changing according to a variety of criteria.
“A significant development effort would be required to put this capability in place today even with the current fare filing system,” Davidson added.
“This effort will not only take time and incur undetermined costs; it will hamper and delay the significant efforts already under way to provide XML connectivity.”
A market-driven solution
IATA said the industry is “clearly” headed toward market-driven solution that is more robust than a short-term deadline would allow.
That is evidenced by the 53 airline-GDS agreements that call for the enabling of ancillary sales through the agency channel, as well as by NDC, it said. (In addition, Travelport has said that more than 60 airlines have signed up for its Rich Content and Branding solution.)
“Given time, this market evolution will exceed DOT’s requirements,” IATA said.