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Industry Urges Standards for Unbundled Air ServicesApril 14, 2010 By: George Dooley
In a rare show of unanimity, more than 200 travel agents, corporate travel departments, travel management companies and travel agency groups from 10 countries urged airlines to work cooperatively to develop industry standards to ensure that the airlines' unbundled products are easily accessible by all travelers.
The coalition of powerhouse organizations sent a letter on April 13 to major U.S. airlines offering to partner with them. They said they support innovative distribution strategies and stimulating airline revenue growth from ancillary products and services. This includes additional fees for checked baggage and pre-reserved seating.
“Consumers expect the travel agents they depend on to have complete and transparent access to booking information to do their jobs,” said Chris Russo, president and chair of the American Society of Travel Agents (ASTA). ASTA and the Business Travel Coalition (BTC) are leading the effort, along with the Interactive Travel Services Association (ITSA).
“Travel agents do not favor separate silos that will make booking air travel more complicated, opaque and expensive,” Russo said. “We urge the airlines to work with us to adopt standards that give fair and equitable access to booking information to all of our members for the benefit of those consumers who choose to buy their air travel through us. Together we can create a win-win-win for travel agents, their customers and airlines.”
The coalition letter was distributed to United, American, US Airways, Southwest, JetBlue, Alaska, Delta and Continental. It includes key principles that the coalition believes will encourage transparency and availability and asks for airline adoption.
The letter argues that the current lack of clarity and accessibility of a la carte products prohibits widespread consumer adoption and blocks achieving the airline revenue generating goals. Revenues, they note, sparked the airline’s implementation of an unbundled pricing strategy in the first place.
A core issue is the effects of airline policy on travel intermediaries, including the GDS, travel management companies (TMCs) and online travel agencies (OTAs) The coalition wants a public-policy debate surrounding the rapid evolution of airline product unbundling and ancillary-fee strategies. This includes the impact on supply-chain participants and corporate customers.
“The success of managed travel programs is reliant upon travel management companies having efficient access to the full range of airline options for any particular trip, and being able to monitor, track and report on the comprehensive final-cost of airfares plus related services purchased,” stated Michelle de Costa, global travel manager for Sapient in a statement. “The verified workflow processes of travel companies and online booking tools that feed into our corporate systems rely almost exclusively upon the airline booking and servicing capabilities of global distribution systems. We are looking for airline partners that acknowledge and respect our needs.”
Unbundling and repackaging strategies bring both promise and risk for corporate managed travel, the Coalition argues. “Corporations, airlines’ most important customers, want a seat-at-the-table and a say in how distribution system changes proceed,” the letter states. “They are proactively coming forward with their views calling for a dialogue that will lead to equitable strategies that ensure the success of all supply-chain participants.”
Corporate travel managers are calling for adoption of industry principles and standards that will not undercut the value of corporations’ contracts with airlines. They want airlines to make available their unbundling initiatives in a way that does not discriminate against a corporation based upon its choice of reservations or fulfillment processes. They also urge airlines to respect the efficiencies of prevailing travel procurement processes used by corporations.
“Major and far-reaching changes to airline business models, occurring in real time, will have significant impacts on all participants in the supply chain,” said BTC Chairman Kevin Mitchell. “Corporations that buy billions of dollars in air transportation services, and that keep the lights on at airlines’ headquarters, are making their consumer preferences known when it comes to how they want to buy these services. Forward-thinking airlines are listening to what we have to say; some carriers have come to realize that to secure more high-yield business travelers, they must respect the modern procurement and travel management practices of their best customers.”
Additional details including the full text of the letter to airlines and the statement of principles and standards are available at www.businesstravelcoalition.com.