Why a consumer voice is important in travel industry dealings — transparency, comparison shopping, privacy

by Charlie Leocha on January 24, 2014

Miami Skyline from Wikimedia Miami Skyline from Wikimedia

 


Today, two organizations that most consumers barely know, the International Air Transport Association (IATA) and Open Allies for Airfare Transparency, are sitting down in Miami to discuss the future of travel distribution. In consumer-speak, they are discussing setting new technical standards that will ultimately determine how travelers will be able to purchase airline tickets, extra fees, hotels, rental cars, cruises and packaged tours.

It’s a tall order with many moving parts. This meeting is momentous because the main players in the drama over how travel should be sold, the airlines and the GDSs (the giant computer systems that link travel agents across the world to sell all travel products) are actually sitting together to discuss the future rather than rant at each other and file lawsuits and counter-lawsuits.

The Consumer Travel Alliance was involved with these discussions from the time that IATA filed their proposals to change the airline ticket distribution system with the Department of Transportation (DOT). The consumer organization filed comments on the IATA proposal that was being considered and met with DOT to make clear that there was strong consumer objection.

The objections focused on four main issues:
• truth in pricing (including ancillary fees such as baggage fees and seat reservation fees) in the original airfare pricing
• maintaining the ability of airline consumers to comparison shop
• no limitation on new technology
• a caution about implementing a system that provides uncontrolled personalization of airfare pricing.

Here is an excerpt from the consumer filing submitted to DOT:

● A mandate by DOT to require that airlines release all of their pricing data, without specifying XML format, would allow technology developers to handle the new complexities being introduced by airlines to their pricing models.
● Freeing airline data would allow all technology players to compete to create the best overall system for providing consumers the ability to comparison shop across airlines including all ancillary fees.
● DOT should require all airlines to file clear tariffs and disclose ancillary fees. Developing a system of prices that are “dynamically assembled” on an airline-by-airline and consumer-by-consumer basis using a system operated and developed by airlines, without the ability to comparison shop across the full range of publicly posted prices, would doom consumers to accepting whatever convoluted pricing airlines offered.
● This IATA application is neither pro-competitive, nor pro-consumer. In fact, it sets the stage for even more uncertainty in airline pricing and more opportunities for unfair and deceptive practices.
● Comparison shopping of the entire airline product across competing airlines must be available in order for consumers to make “informed choices.

For almost a year, these discussions have been going on back and forth between various elements of the travel community. Consumer Travel Alliance was involved together with the Society of American Travel Agents (ASTA), GDSs, travel management companies and the Business Travel Coalition in focusing the issues on technology standards and maintaining the ability to comparison shop with full air transportation pricing, including ancillary fees. Consumers were consulted by the highest levels of IATA and the airlines during this period.

At the World Passenger Symposium, held by IATA in Dublin, the president of Consumer Travel Alliance spoke at a news conference about the pending IATA resolutions that were scheduled to be debated during that conference. The effort was designed to pressure IATA to include truth in pricing and comparison shopping in their deliberations.

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 Consumer Travel Alliance comments continued with an examination of privacy and innovation under the published IATA proposals.

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 IATA proposal also proposed personalization of airfares based on personal “big data.” Here the Consumer Travel Alliance noted, “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.”

Never before have consumers had a seat at the table to discuss how travel would be sold to them. Never before have the major players found a way to sit together and discuss these issues. And, for the first time, there will be an independent consumer watchdog looking over the industry’s shoulder focused on protecting truth in advertising, comparison shopping, privacy and innovation.

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