Ruden: IATA Should ‘Start Over’ on Distribution Plan

by Michèle McDonald
Ruden: IATA Should ‘Start Over’ on Distribution Plan

ASTA last month joined a chorus of travel agency voices urging the U.S. Transportation Department to reject IATA’s Resolution 787. The resolution sets up the framework for its New Distribution Capability, or NDC.

“I think they should go back to the beginning and start over,” ASTA’s Paul Ruden said this week.

After IATA asked DOT in March to approve Resolution 787, public comments followed party lines – with airlines and their associations supporting approval and travel agencies and their representatives opposing it.
 
In its filing with the DOT, ASTA said “the application, and the limited information adduced to support it, have not come close to passing the threshold imposed by rigorous application of the ‘public interest’ standard that is the governing decisional criterion. ”

Ruden, ASTA’s senior vice president of legal and industry affairs, spoke with Michele McDonald, Travel Market Report’s technology editor, about the trade group’s position on NDC.

What are your chief objections to Resolution 787/NDC?
Ruden: We cannot tell from reading the resolution and the documents from the development process what this thing really is. There is evidence of two radically different interpretations.

One is that this is a revenue play for the airline industry. They will end up with a higher overall price level.

The other is that the airlines have had an epiphany: They have decided they love agents after all and want to help them compete with airline websites – not a revenue play at all!

Based on the evidence, we are unable to support the application unless a long list of conditions is imposed.  

You’ve said from time to time that IATA has made contradictory statements. Can you be specific?   
Ruden: They’ve said the regular fare system will continue to exist in parallel, but there’s a lot of evidence that that is not what they’re planning.

They’ve said there will be transparency, yet [IATA director general Tony] Tyler talks about the evils of transparency.

They make all these statements and they have all these talking points. Then we look at the working documents and see that this is potentially very bad.

Is it the concept of authenticated shopping [in which airlines personalize offers based on customer info] that disturbs you?
Ruden: It’s that the airlines got together to do this. If airlines individually were to attempt to introduce authenticated shopping, they would take the risk and be successful or not. That they got together is not a good sign.

IATA says in the NDC environment, personal details such as marital status and birthdates may be sent to airlines so they can craft personalized offers. You’ve raised issues about privacy in this scenario.
Ruden: Big Data has the potential for clumsiness. We all know the story of how Target figured out that teenage girl was pregnant before her parents did. It’s not just one piece of data – it’s all of it together, and the way you piece it together.

And what happens to your information? Are they going to send it to some obscure airline in a foreign country with no privacy protections? IATA should have been more sensitive to privacy issues. They should have addressed this.   

What do you think IATA can do at this point?
Ruden: If you want to build consensus, everyone has to have the same reality. You build trust through openness. That doesn’t mean everyone says, ‘I get it; I love it.’ But you have to develop trust early. You can’t get there any other way.

We’ve never said ‘no way’ to this thing. I don’t ever want agencies to say no to something that could help them.

I think they should go back to the beginning and start over. If it’s a good thing, they’ll get a lot of cooperation. But they can’t get there by just making these assertions.

What happens if the Transportation Department simply decides not to decide one way or another – if DOT doesn’t approve or disapprove of the resolution?
Ruden: Dismissal leaves them in a difficult position. DOT is being asked to reject IATA’s application because of all the unanswered questions.

I think it would be a very high risk move if IATA just goes ahead with it under those circumstances. It’s total speculation on my part, but they might be free to re-file.

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