October 17 - ASTA and BTC Challenge IATA Claim of Transparency


Alexandria, Va., - The American Society of Travel Agents (ASTA) and Business Travel Coalition (BTC) today sharply disputed claims by Tony Tyler, CEO of the International Air Transport Association (IATA) that the development of the “New Distribution Capability” (NDC) was being conducted in open and transparent collaboration with all segments of the travel industry that would be affected by it. Nothing could be further from the truth.

“ASTA sees nothing in the IATA process to create NDC that resembles full and open transparent collaboration with the travel agency community,” said Nina Meyer, CEO of ASTA.  “ASTA had asked to participate as an observer, with the possibility of posing questions, to the IATA Working Group on NDC in Montreal in late November.  IATA’s response was initially positive, citing a desire to collaborate. ASTA then invited IATA to come to its TRADESHOW in Los Angeles in September to meet with travel agencies and the Business Travel Coalition and respond to questions.  When ASTA later asked for details of its Montreal participation, it was told that neither it nor any other agency associations would have access to the development process for NDC. IATA did express a willingness to meet separate with ASTA, but that is far from the full collaboration and openness that IATA is trumpeting,” Meyer added.

BTC Chairman Kevin Mitchell said, “While we are still conducting due diligence with regard to understanding all the facts and implications flowing from IATA's new distribution initiative, it's reasonable to preliminarily conclude from discussions with and presentations from IATA that there is reason for significant concern over negative impacts to consumers, competition and costs. A disturbing warning sign - that all is not right - is that IATA pointedly talks about an open and collaborative industry process, yet refuses to let organizations that represent travel agents and corporate travel departments have a seat at the table. IATA only welcomes individual travel agents or travel managers who are largely prevented from speaking up for fear of retaliation on their businesses or airline contracts. BTC is among several industry organizations in the U.S. and abroad that requested to be part of the process only to be told no by IATA.”

Nina Meyer added, “The need for complete transparency regarding NDC is illustrated by some of the false premises for NDC that Mr. Tyler stated in his speech before the IATA World Passenger Symposium being held in Abu Dhabi this week.  Mr. Tyler stated that because the majority of air travel is sold by travel agencies relying on Global Distribution System (GDS) technology, “the travel offer is put together outside the airline by third parties… it is impossible for the airline to tailor its offer to the customer via the indirect channel…. this model is focused only on finding the lowest ticket price. This has resulted in the commoditization of air travel…. the travel agent only sees codes – F, J, Y…. There is no way to tell if your “J” product is a flat bed or an economy class seat with an empty seat beside it.”

These remarks essentially blame travel agents for airlines’ commoditization of their product. But it is airlines that have set prices since deregulation and entered into commoditized code share agreements, not travel agents. Agents sell what the airlines offer.  And ASTA rejects categorically the notion that travel agents do not understand what they are selling and are unable to communicate product characteristics to their clients.  If that were true, agents would have disappeared long ago, but instead in the United States alone they sold $68 billion in air transportation in 2011.

Moreover, Mr. Tyler’s remarks cite as current airline innovations such items as “special meals, expedited boarding, roomier seats and access to airport lounges.”  Most of these “innovations” have been around for years. If these products are made available to agents in a transparent and transactable manner, which is entirely possible through GDS technology and the ATPCO OC process, travel agents will sell more of them to consumers to the benefit of consumers and airlines alike. ASTA has seen demonstrations of GDS technology that has these capabilities and more.  Rote repetition of the claim that the GDSs can’t do this does not make the claim any truer.”

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