April 7 - Questions IATA Needs To Answer About Resolution 787


Is it well accepted, and used by airlines to justify recent mega mergers, that price transparency is the lifeblood of competition in the airline industry and helps ensure that consumers trust the shopping and purchasing process. Such trust encourages consumers to buy more services more often. Over the long term, providing such transparency increases competition, creates market efficiencies, encourages innovation, expands markets, increases sales of airline services and satisfies consumers. These are positive outcomes that NDC appears designed to contravene.

Given the potential global impact on consumers of Resolution 787, it is time for IATA to set the public record straight on a number of threshold questions including the following:

1. Can IATA point to studies, surveys or testimonials to demonstrate that individual airline consumers or travel managers are demanding personalized offers and “authenticated” shopping?

2. Is it true that under NDC the current transparent model for the pricing of tickets where virtually all fares are published and publicly available for anonymous comparison-shopping and purchase by all consumers on a non-discriminatory basis would continue in parallel in markets where there would be both NDC and non-NDC participating airlines? And what guarantees can assure consumers that this will really be the case?

3. Millions of consumers compare fares and schedules on sites like Opodo, Kayak and Travelocity before taking a decision to purchase a ticket on an airline website. Can IATA guarantee that these comparison-shopping sites would continue to have access to virtually all fares and schedules? And again, what guarantees can assure consumers that this will really be the case?

4. Authenticated shopping could be a major problem for consumers because NDC-participating airlines could use the required information to discriminate both by sales channel and against price insensitive travelers. Is IATA able to guarantee that the same consumer who provides her personal information and who is booking through the travel agency channel would not see higher offers than through airline direct channels? Is IATA willing to mandate that NDC participating carriers must be channel neutral and not discriminate against consumers when using a travel agency?

5. What safeguards has IATA considered and implemented to protect business travelers requiring en route changes from facing higher prices from airlines that know such travelers have little choice but to accept their “personalized” offers as lower-priced alternatives could be blocked from view?

6. Under NDC would regulators, academics, legislators, travel managers and travel management companies continue to have access to comprehensive paid-market-pricing data to have visibility to fare trends, to inform policy deliberations and to benchmark the value of airline contracts?

7. NDC requires that a consumer’s personal information be electronically transmitted by a travel agency to all carriers in a market as a condition of an offer being returned and without the consumer being aware of which domestic or foreign carriers would be receiving the sensitive information or what their data privacy policies were. Is IATA planning for harmonized data privacy policies for all participating NDC carriers to solve this data-privacy problem? And how does IATA propose to ensure effective communication to consumers in ways that flag the important issues such as how a variety of foreign airlines involved in making an offer would handle, share and retain their personal information? 

8. For what legitimate business purposes would airlines participating in NDC need each of the following personal data points from consumers before providing an offer: frequent flyer status on competitor airlines, age, marital status, national origin and place of residence? Can IATA identify other consumer-products industries that require potential customers to profile themselves to a merchant, in fact multiple merchants, as a condition of receiving a bona fide offer?

9. Can IATA guarantee that consumers, as a consequence of non-consent regarding providing personal information, would not face negative consequences such as punitive “rack-rate” fares? Can IATA likewise guarantee that under its new model that consumers shopping anonymously would always receive bona fide offers in NDC markets from airlines participating in NDC in said markets? And again, what guarantees can assure consumers that this will really be the case?

10. Did IATA consider and emplace safeguards to prevent participating NDC carriers from colluding expressly or tacitly in dividing markets which would be orders-of-magnitude more easily facilitated by authenticated shopping and other aspects of this new market structure such as making the business processes compulsory should an airline choose to implement NDC?

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