March 14 - Coalition urges passage of Sen. Collins’ legislation to drive airline competition


COALITION OF BUSINESS TRAVEL LEADERS URGES PASSAGE OF SEN. COLLINS’ LEGISLATION TO HELP DRIVE AIRLINE COMPETITION 

32 organizations write U.S. Sen. Collins on need for greater airline transparency and competition to protect American businesses and consumers

The Business Travel Coalition (BTC) today announced that 32 prominent travel industry organizations signed a letter to U.S. Senator Susan Collins of Maine thanking her for her leadership in legislative efforts to protect companies and consumers by promoting transparency and competition in commercial air travel. The leaders of corporate travel departments, travel management companies (TMCs) and travel associations represent millions of customers who spend billions of dollars annually on business and leisure air travel.

Sen. Collins has introduced legislation to ensure that the U.S. Department of Transportation (DOT) resumes collecting critical information as part of a fact-finding review, known as a “request for information” (RFI). An RFI was launched in Oct. 2016 and abruptly suspended by DOT, prior to the deadline to submit comments, in March 2017, with no action taken despite overwhelming public support to do so.

Less competition driving higher fares

In their letter, the signatory organizations explained a series of actions that are reducing competition and putting upward pressure on the cost of air travel for American businesses and consumers including:

· government approval of exemptions for airlines’ global alliances and joint ventures from antitrust laws that would otherwise protect consumers and competition;

· massive consolidation of the domestic U.S. airline industry into just four carriers controlling more than 80 percent of domestic seat capacity; and

· airlines fortifying their monopoly market positions and protecting their record-setting profits by blocking foreign competition and reducing consumer choice. 

Restricting access to complete information reduces consumer choice

Some U.S. airlines have been withholding and restricting access to complete airfare, schedule and inventory availability information from some of the metasearch platforms and third-party travel sites relied on by consumers and businesses. In their letter to Sen. Collins, the coalition said, “Airlines have reduced consumer choice by making it exceedingly more difficult to comparison shop for the best flight at the lowest price in a transparent, simple and efficient way.” 

According to a study conducted for the International Air Transport Association (http://btcnews.co/2paf4gZ), the global airline industry’s lobbying group, “airlines anticipate third-party retailers will account for fewer reservations between 2016 and 2021, as carriers admit they will place more focus on direct (including their own websites) distribution.” The airlines plan to make this shift despite the fact that the same study says, “Passenger loyalty to airlines has reached an all-time low,” and “43 percent of leisure passengers and 51 percent of business passengers want to spend less time researching flights.”

In their letter, the coalition explains what happens when independent travel tools are unable to provide consumers with all their choices, saying, “When consumers can only find the information they need on airlines' own websites, consumers will almost always pay more due to the fact that an airline's offerings are no longer in a competitive environment. Further, search costs increase dramatically when consumers have to visit numerous airline sites to gather information to make an informed choice.”

Airline practices driving unnecessary costs on U.S. businesses

The airlines’ practices are not only impacting consumer metasearch platforms and online travel agencies. The signatories to the letter to Sen. Collins say these practices “are indicative of a pattern where airlines are making it harder for all agents, including larger travel management companies, to secure the information they require. For example, access to ancillary fees is not universal, which adds administrative costs to TMCs and their customers when they have to shop and purchase base airfares within the travel ecosystem, and then pay for bags and seats outside the system.”

“We thank you for your continued leadership on behalf of consumers in support of transparency and competition in the airline industry,” said the coalition to Sen. Collins.

©2001 to 2018 Business Travel Coalition, Inc..