This talk was given on the Monday before IATA’s World Passenger Conference (at which no passengers seem to be invited to attend) held in Dublin, Ireland. Charlie Leocha presented together with representatives of the American Society of Travel Agents, the Business Travel Coalition and the Travel Technology Association.
Over this past year, there has been plenty of lively discussions regarding price transparency, airline competition and ways that consumers can comparison shop across airlines for tickets. The pending Department of Transportation NPRM that is expected to include language requiring airlines to disclose passenger-specific and flight-specific baggage and seat-reservation fees seeks to repair the current system. IATA’s new Resolution 787 proposed upending the entire airline ticketing process and replacing it with a new standard.
Ever since major airlines began unbundling airfares and separating out reservation and baggage fees, consumers have not been able to compare prices across airlines without going through an arduous reservation process airline-by-airline.
Let’s be perfectly clear, consumers don’t like this bounty of airline fees, but we are faced with a reality that they will not go away. If the fees are here to stay, consumers at the very least are looking for clear disclosure of fees and systems that can integrate these fees and their exceptions to allow comparison shopping across airlines.
I believe we are at a watershed moment when it comes to airline ticket sales and that a collaborative approach including the airlines, GDSs and ticket agents can come from IATA’s call for a modern distribution language that can be applied across all sales channels. The industry needs an overarching approach to distribution in order to deal with the complexity introduced into the buying process by the proliferation of ancillary fees and the maze of of exceptions to many of those fees based on frequent flier status, credit card usage and the association of excepted passengers with others on the same reservations.
The permutations of different overall prices for airfare grows to astronomical numbers when a family of four books tickets separately and decides to include baggage fees and seat reservation fees in their comparison shopping deliberations across airlines. The system needs to be developed so that consumers who are footing the bill can understand what they are buying and have the ability to comparison shop across airlines.
Besides the basics of allowing consumers to comparison shop for the best aviation product, the industry needs to be aware of two other enormous issues — privacy and innovation.
I was appointed by the Secretary of Transportation to serve on the Advisory Committee on Aviation Consumer Protections. During the past year this committee has held hearings about privacy in a world of increasingly big data. Our discussions included for the first time representatives of the FTC, airlines, travel agents, online travel agents, GDSs and the DOT. As the industry dives deeper into the world of customized pricing it should be aware that privacy concerns will only increase.
Passengers should be provided a way to anonymously shop for airline tickets and to find the best flight for them. Providing personal information should not be a prerequisite in order to be provided a price. Customization should be at the request of the traveler, not demanded by the airlines. Passengers should be allowed to choose what services they desire, much as they choose entrees at a restaurant — off a menu provided by the airlines. Of course, airlines can create special “packages.” A family package might include WiFi, snacks and seat reservations. A business traveler package might include access to the airport lounge, WiFi and early boarding. Another package might include early boarding, baggage and no change fees, just like American Airlines offers today.
The choice of these ancillary services and airline packages must be at the behest of the passenger, not imposed on them by the airlines based on data gathered from other sources. If airlines persist in demanding personal data such as marital status and home values, they should be ready for a strong pushback from consumers and new rules from DOT requiring the disclosure of all data files the airlines hold about passengers.
The other major issue is innovation. When the airline industry refuses to disclose its ancillary fees with all of their exceptions and rules, innovation is stymied. The biggest change in distribution of airline tickets came from outside of the aviation industry. These leaps in customer friendliness were the result of the open data provided by the aviation community. Expedia developed a way to provide Internet users an easy way to see airline prices for all airlines, show them side by side on a computer screen, allow consumers to compare prices and purchase tickets. ITA Software, since purchased by Google, took its data from the airlines’ own ATPCO. Their software engineers created an alternative to the GDS-centric model that runs the bulk of travel agent and airline websites.
However, today, top-of-the-line software engineers and budding programmers are hindered in their development of new airline/customer interfaces because airlines are continuing to withhold ancillary fee data from the overall travelsphere.
There are many excuses for this situation, but the lack of technology to handle the complexity of the airline ticketing process has been trotted out as the main reason for the airlines’ reluctance to share their ancillary fee data. In my opinion, airlines are cutting off their noses to spite their face.
By not fully disclosing ancillary fees and the maze of exceptions to their sales channels they are losing sales. Every survey I have seen concludes that when passengers are given choices to upgrade their services they leave with a better experience, knowing that they have the opportunity of choice.
And, when the airlines stymy competition by not disclosing important data needed to provide clear choices to their customers and the ability to comparison shop, they damage innovation that could make their interaction with passengers far easier and more pleasant and ultimately allow passengers to benefit by many of the airline exemptions and special programs hidden within the airline computer systems and its torturous fee and fare rules.
The Consumer Travel Alliance clearly supports any solution that would allow passengers to easily compare prices across airlines, including ancillary fees. We support any solution that allows passengers to purchase their complete ticket — including seat reservations, baggage and other fees — anywhere airline tickets are sold.
Plus, we cannot forget that changes in the aviation reservations systems cannot be seen in a vacuum. There is an entire universe of travel providers, including hotels, vacation homes, cruise lines, car rental companies and tour operators, that must be considered as standards are developed.
It is time for all stakeholders in the travel industry to come together to forge a new technology standard. This kind of collaboration will allow all of the stakeholders — airlines, hotels, cruise lines, car rental companies, tour operators, travel agents and GDSs — to work together to create a system that allows transparent pricing of air transportation and other travel providers, provides real-time comparison shopping, allows travelers to choose services they desire and provides a path to innovation.