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Industry Groups React to Two Major DOT Decisions

May 22, 2014

washington dcThe Department of Transportation (DOT) handed down two major decisions yesterday regarding proposed changes to the rules governing how air travel is advertised, as well as approval of Resolution 787. Major industry groups are weighing in. 

Proposed Consumer Protections

The first of the DOT's decisions involved a proposal that would tighten the rules governing how air travel is advertised. Airlines and ticket agents would be required to disclose fees for certain basic, additional services at all points of sale, including first checked bag, second checked bag, one carry-on item and advance seat assignment. Additionally, the rules would expand the definition of ticket agent to include online flight search tools, such as those offered by Kayak and Google

The Business Travel Coalition (BTC) applauded the proposal, as well as the decision regarding Resolution 787. 

"DOT has protected competition and consumers by imposing several important conditions on its approval of Resolution 787. Likewise, consumers will benefit from greater price transparency by the Department’s proposal to require airlines to provide real-time pricing of core ancillary services (e.g., for checked bags) wherever they sell their tickets. We urge the agency to ensure that consumers can purchase these services from travel agents at the same time as an airline ticket," said BTC chairman Kevin Mitchell

At the same time, the BTC offered criticism of the Transparent Airfares Act, which is now being considered by the House of Representatives. "What’s more, the recklessness, anti-consumer H.R. 4156, the Transparent Airfares Act of 2014, is placed in stark relief as it would undermine DOT’s authority to police unfair and deceptive airline practices," the BTC said. 

The Global Business Travel Association (GBTA) also argued in favor of a move toward more transparency in airline ticket pricing. 

“GBTA will carefully review and comment in greater detail on the Notice of Proposed Rulemaking (NPRM), however we maintain support for the free-market right of businesses to create and follow their own chosen business models, including charging ancillary fees. But travel buyers and their agents must be presented with an accurate view of the full cost of products. To that end, it is imperative that there is full transparency to buyers on fares and fees. This also applies to booking, ticketing, billing and fulfilling those services,” GBTA executive director and COO Michael W. McCormick said.

Approval of Resolution 787

The DOT's approval of Resolution 787, or the New Distribution Capability, came with several consumer safeguards for the XML messaging standard. According to the terms of the DOT's approval, air travel shoppers could not be required to disclose personal information and airlines and ticket agents would be obligated to follow their published privacy policies on the sharing and storing of personal information. 

Both the Open Allies for Airfare Transparency and the Travel Technology Association found merit in the decision. 

"Open Allies and its more than 400 members are very pleased that (DOT) Secretary Foxx and the Department of Transportation have shown their commitment to protecting consumers from hidden airline fees through this rulemaking," said Andrew Weinstein, director, in a statement.

"We will review the proposal and submit more specific comments to the docket to make sure the final rule achieves its goal of enhancing airline consumer protection in the most practical and effective way for travelers and other stakeholders in travel distribution," Weinstein said.

Philip Minardi, director of communications and public affairs for Travel Tech, said, "Travel Tech is encouraged by Secretary Foxx and the Department of Transportation's (DOT) expressed commitment to protecting consumers."

The International Air Transport Association (IATA), which launched Resolution 787, was also pleased by the decision. 

“The use of common technical standards could facilitate the marketplace development of distribution practices and channels that would make it easier for consumers to compare competing carriers’ fares and ancillary products across multiple distribution channels, make purchasing more convenient, allow carriers to customize service and amenity offers, and increase transparency, efficiency, and competition,” the IATA said. 

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