Trade Group Should Shelve Resolution And Apply For A Business Review Letter
WASHINGTON, DC – Business Travel Coalition (BTC) today called on the International Air Transport Association (IATA) to abandon Resolution 787 and the included “New Distribution Capability” (NDC) and apply to the U.S. Department of Justice for a Business Review Letter. NDC represents a new, worldwide business model for the pricing and sale of airline tickets. As evidenced by public statements and comments filed with the U.S. Department of Transportation, an expanding number of travel organizations from around the world are raising questions, concerns and objections to the IATA Resolution and consider it antithetical to the public interest.
IATA has identified commoditization as a problem for some airlines. However, a horizontal agreement among airline competitors to terminate the very fare transparency from which consumers have long benefitted is misguided in the extreme. This construct for change needs to be abandoned and replaced with a responsible, thoughtful planning process that includes customers, distribution system participants and regulators.
IATA should carefully consider stakeholder feedback below, shelve Resolution 787, start over, and when prepared, file with the DOJ for a Business Review Letter. If IATA were to receive a favorable Letter, then the industry would be assured that an independent government agency expert in antitrust law and with the power to investigate and compel testimony looked closely at an IATA Resolution and was comfortable that competition and consumers would not be harmed.
Visit http://www.btc.travel for more information and to view a recent webinar on IATA Resolution 787.
"To correct the current situation, ECTAA/GEBTA respectfully urge DOT to reject Resolution 787, and the included New Distribution Capability (NDC), as crucial questions for the travel distribution sector remain unclear. ECTAA/GEBTA believe that the most efficient way forward is to start an open and transparent dialogue between all travel industry stakeholders in order to develop solutions that take into account the concerns of all players involved." EUROPEAN TRAVEL AGENTS' AND TOUR OPERATORS' ASSOCIATIONS (ECTAA) AND GUILD OF EUROPEAN BUSINESS TRAVEL AGENTS (GEBTA)
“ASTA members advise and advocate for the traveling public. ASTA members applaud and adopt new technology that facilitates service of the traveling public. Comparative shopping is one of the bedrocks of a free and open market, and movement to restrict or impair comparative shopping is harmful to consumers. As such, ASTA recommended that DOT reject NDC as currently proposed.” THE AMERICAN SOCIETY OF TRAVEL AGENTS (ASTA)
“The Alaska Air Carriers Association implores the United States Department of Transportation to unconditionally deny Resolution 787 from IATA. We oppose any infringement on individual rights, especially when the information is not needed to purchase a ticket, can give preferential treatment to some, and can result in discriminatory practices against others who may not have the same buying power.” THE ALASKA AIR CARRIERS ASSOCIATION (AACA)
“It is a fact that passenger air transport markets have become more concentrated as a result of privatizations, mergers, acquisitions and commercial agreements between airlines geared to reduce competition (e.g., alliances and code-shares). This new air fare distribution system will foster even less competition between air carriers and thus negatively impact consumers.” ARGENTINA ASSOCIATION OF TRAVEL AND TOURISM (AAAVYT), BOLIVIAN ASSOCIATION OF TRAVEL AND TOURISM (ABAVYT), BRAZILIAN ASSOCIATION OF TRAVEL AND TOURISM (ABAV), CHILEAN ASSOCIATION OF TOURISM INDUSTRY (ACHET), COLOMBIAN ASSOCIATION OF TRAVEL AGENCIES (ANATO), ECUADORIAN ASSOCIATION OF TRAVEL AND TOURISM (ASECUT), PARAGUAYAN ASSOCIATION OF TRAVEL AND TOURISM INDUSTRY (ASATUR), PERUVIAN ASSOCIATION OF TRAVEL AND TOURISM (APAVITPERÚ), URUGUAYAN ASSOCIATION OF TRAVEL AGENCIES (AUDAVI), VENEZUELAN ASSOCIATION OF TRAVEL AND TOURISM (AVAVIT)
“There are too many questions without answers. Will NDC create any real benefit for the corporation who is paying for travel? Or is this just another attempt to reduce airline distribution costs at the expense of the buyer in the form of reduced price transparency and more complexity in the distribution process itself?” GLOBAL BUSINESS TRAVEL ASSOCIATION (GBTA)
“However, from what we could assess from IATA’s application, CWT is concerned about the potential for Resolution 787 to adversely affect the prices our clients pay for air travel, based on IATA’s intent to: 1. shift from fare transparency to fare opacity by removing the ability to comparison shop between carriers; and 2. remove travelers’ ability to shop anonymously by requiring they provide personal information before being quoted a flight price, which could lead to biased pricing based on traveler characteristics.” CARLSON WAGONLIT TRAVEL
“IATA pushed through Resolution 787 without any collaboration from the agency world.” SCOTTISH PASSENGER AGENTS’ ASSOCIATION (SPAA)
“We send people, but they walk in and the decisions have been made and the performance is dead on arrival.” JEREMY WERTHEIMER, GOOGLE TRAVEL VICE PRESIDENT
"What Resolution 787 seems to be proposing is a new business model and the standardization of computer language that is far different from previous standards that applied to data. This is harmful to the aviation industry as a whole because it will stymie innovation, competition and technology development. Any rules that specify data format are anti-technology and anti-progress." CONSUMER TRAVEL ALLIANCE
"Regarding the NDC (New Distribution Capability) project to be launched by IATA, we manifest our absolute rejection of the indicated aspects in the present document." PERUVIAN ASSOCIATION OF TRAVEL AGENCIES AND TOURISM (APAVIT)
“NDC will provide IATA with confidential customer profile information currently stored by travel agencies and tour operators thus creating a vulnerable situation both for the independent distribution channel and for the consumer, especially in those markets with presence of dominant airlines.” ECUADORIAN ASSOCIATION OF TRAVEL AGENCIES (ASECUT)
"With the NDC model proposed by IATA, the distribution system of air fares will be controlled by one of the market actors: major airlines (most of them for-profit privately held companies) associated to IATA, meaning that the transparency principle protected by the current model would be conditioned by the interest of one of the afore-mentioned party." ARGENTINE ASSOCIATION OF TRAVEL AGENCIES AND TOURISM (AAAVYT)
We send representatives to NDC meetings, and decisions are made and we go along with them. We don’t have input.” CRAIG BANKS, TRAVELPORT’S SENIOR DIRECTOR OF GLOBAL DISTRIBUTION SALES AND SERVICES
"…our conviction is that implementing NDC will ensue discrimination against the indirect and independent sales and distribution channel and thus foster conditions for the development of a less competitive air transport marketplace." BOLIVIAN ASSOCIATION OF TRAVEL AND TOURISM (ABAVYT)
"Furthermore, major airlines competing in a particular market might collude (collaborate) in the distribution of their product offer and air fares - reducing competition among each other- and hinder competitiveness in the market." CHILEAN ASSOCIATION OF TOURISM INDUSTRY (ACHET)
"IATA-generated documents leave no doubt that the fundamental and paramount purpose of Resolution 787 is not to facilitate some benign messaging standards, but rather a concerted effort by some airlines to end the current business model that ensures fare transparency and to replace it with the ultimate in fare shrouding where every price quoted depends on exactly who wants to know. And the motivation of carriers driving this initiative could hardly be clearer: They hope to have a freer hand to take up prices consumers pay to travel." BUSINESS TRAVEL COALITION