The airline industry has decried publicly a problem it describes as the “commoditization” of airline services caused by the current system of publicly available and transparent fares. As stated in an interview with Flight Global in July 2012, Tony Tyler, Director General of the International Air Transport Association (IATA), gave voice to this problem and hinted at the coordinated solution:
“We’ve done a great job of improving efficiency and bringing down costs, but we’ve handed that benefit straight to our customers,” Tyler says. “As soon as someone’s got a cost advantage, instead of charging the same price and making a bit of profit, they use it to undercut their competitors and hand the value straight to passengers or cargo shippers – and you’ve got to ask why? I think one of the reasons is that the way we sell our product forces us to commoditize ourselves.”
The world’s most powerful airlines and alliances have agreed on a new worldwide business model for how to price and sell tickets. The model is called New Distribution Capability, or NDC, and IATA is spearheading implementation. The goal for NDC is to terminate, by agreement among horizontal competitors, the current transparent model for the pricing of tickets, where fares are published and publicly available for comparison-shopping and purchase - by all consumers on a non-discriminatory basis. To accomplish this goal, airlines would demand consumers’ personal data and put their privacy, security and mobility at risk.
NDC would require consumers to give up substantial personal information - before being provided offers by airlines. The personal information includes – but is expressly said not to be limited to -- name, age, nationality, contact details, frequent flyer numbers, whether the purpose of the trip is business or leisure, prior shopping, purchase and travel history and marital status.
The purpose of this collection of documents is to elevate public-policy discourse and lay bare the purpose, objectives and consumer harm that would flow from NDC if implemented as discussed and outlined in IATA’s documentation and presentations. The following documents can be found enclosed:
· IATA Resolution 787: A Binding Agreement Among Horizontal Competitors
· BTC U.S. House Testimony That Amplifies How Toxic NDC Would Be
· A BTC Brief Providing A General Overview Of NDC
· Supplemental Brief #1 Discussing Required Surrender Of Personal Information
· Supplemental Brief #2 Quoting Airlines & Academics About Comparison Shopping
· Supplemental Brief #3 Addressing Why NDC Eliminates Publicly Posted Prices
· Supplemental Brief #4 Detailing Points IATA Should Be Pressed On
· ASTA & BTC Presentation To Regulators
· Media Coverage Of NDC