09 Dec Travel Tech Provides Comments on Ancillary Fee Notice of Proposed Rulemaking at (ACPAC) December Public Meeting
Oral Comments of
Laura Chadwick, President & CEO, Travel Technology Association
United States Department of Transportation
Airline Consumer Protection Advisory Committee:
Concerning Data Sharing to Ticket Agents in the
Ancillary Fee Notice of Proposed Rulemaking
December 8, 2022
On behalf of the Travel Technology Association (“Travel Tech”), thank you again for the opportunity to address this meeting of the Aviation Consumer Protection Advisory Committee (ACPAC) about the Department of Transportation’s (DOT) Ancillary Fees Transparency Notice of Proposed Rulemaking (NPRM) proceeding. Travel Tech advocates for public policy that promotes market transparency and competition to encourage innovation and preserve consumer choice. We represent the leading innovators in travel technology, including online travel agencies and metasearch companies, travel management companies, global distribution systems, and short-term rental platforms.
Travel Technology Association members are critical stakeholders in this matter as they will directly implement many provisions of the final regulation. Millions of Americans rely on our member companies to do comparative searches to find the best flight options and to book their airline travel. Many of the proposals in the proposed NPRM will impact intensely complex back-end systems maintained or supported by Travel Tech members and the corresponding display of billions of dynamic data points.
As I stated earlier, the Travel Technology Association applauds the Department’s continuing work and commitment to this vital consumer protection matter. Travel Tech has long advocated not only for ancillary fee transparency for airlines but resort fee transparency for hotels as well. In 2014 and 2017, we supported the Department’s proposals to require airlines to share their ancillary fee information with ticket agents so that consumers could have complete visibility into the cost of their flight options, regardless of whether they use a direct or indirect channel to book their air travel. This is a worthwhile undertaking, and we stand ready to support you, ACPAC members, and the Department as it moves forward.
Today, the current state of play is this: as the text of NPRM notes, “While fare, schedule, and availability information are currently provided by the airlines to the GDSs, and by GDSs to the agents that display and sell to consumers, information about the cost of ancillary services is not typically shared.” (emphasis added.) As a practical result, consumers lack transparency about the ancillary fee costs prior to the purchase of their tickets through online travel agencies. Nonetheless, this same NPRM does not specify how critical ancillary information is to be disseminated to ticket agents, many of which currently receive fare and schedule information from a range of sources. The Department proposes to exclude GDSs from distributing ancillary fee information, even though the Department itself acknowledges that “GDSs may provide the lowest cost and most efficient way of distributing [fee] information to ticket agents that sell or display the carrier’s ancillary services.”
Many are asking the reasonable question as to why the Department would forgo such an obvious solution to the distribution of ancillary service fee information when the airlines are already choosing GDS technology to distribute their fares, schedules, and availability. The Department shares its reason why in the NPRM itself: stating that it is “attempting to minimize government interference with business relationships.”
The Travel Technology Association strongly believes that DOT must require the airlines to share ancillary fees through the same distribution channels utilized by ticket agents and metasearch sites for fare, schedule, and availability information. The Department should reconsider its conclusion to exclude GDSs in an effort to minimize government interference with contracts between airlines and GDSs. The cleanest, most direct way to solve the issue of transparency for consumers is for the airlines to provide the ancillary fee data to GDSs along with fare, schedule, and availability information as they already do. Travel Technology Association members agree that this is the most sensical approach, as do many of the other stakeholders gathered here today. Additionally, GDSs are not the only source of information for ticket agents, and distribution through all channels used to distribute fare and schedule information – such as ATPCO, and other intermediaries and aggregators – should also be required.
In the end, any requirement by the Department that airlines must share fee information with ticket agents will necessarily have some impact on business relationships. It’s inescapable. Under the Department’s NPRM proposal, ticket agents will nonetheless be forced to forge new business relationships and negotiate with more than 200 airlines in order to display this ancillary fee information. This does not make sense. Ticket agents will have to supplement the fare, schedule, and availability information they already receive through the GDS and match it to the ancillary data provided directly by the airline, a herculean task beyond the scope of a ticket agent’s day-to-day operations. Ticket agents will each individually need to take on resource-intensive development costs to make the ancillary information visible and usable on their platforms. These costs are prohibitive for many agents and a hardship as well since a clear solution already exists and is widely used – that the airlines provide ancillary data through all distribution sales channels already utilized by ticket agents and metasearch sites, including GDS, ATPCO, and other intermediaries and aggregators. This is the Travel Technology Association’s position on the matter. Again, it is the cleanest, most direct way to solve the issue of transparency for consumers, and we hope, ACPAC members, that you will agree.
There is no reason to draw the line arbitrarily at GDSs and force ticket agents to take on the development and business costs that have already been provided by the GDSs. The Department announced a different approach in 2017. After considering the substantial number of comments filed on the issue in response to its 2014 rulemaking notice on ancillary fees, it issued a supplemental rulemaking notice where it concluded that airlines should be required to share ancillary baggage fees with GDSs. We submit that the Department was right then and should follow that same determination here. Otherwise, in the end, it will be the consumer who will suffer, when this rulemaking’s ostensible purpose is to improve consumer outcomes.