[Travelandtourism] FYI.....

[STEPHANIELSCOTT at aol.com]

Airlines Resist U.S. Role in Feud With Travel Firms on Fee Data

By John Hughes and Mary Schlangenstein -  Apr 12, 2012 12:01 AM ET 
 
 
 
 

Passengers use Air France-KLM e-ticket machines at Orly  Airport, near 
Paris,.


 
 
 
 
Passengers use Air France-KLM e-ticket machines at Orly  Airport, near 
Paris,. Photographer: Antoine Antoniol/Bloomberg 


The fight is reaching Transportation Secretary Ray LaHood’s desk after 
raging  on _Capitol  Hill_ (http://topics.bloomberg.com/capitol-hill/)  and in 
courtrooms and private negotiations. Airlines want to supply  data directly 
to travel agents and customers, tailoring their offerings to  individual 
buyers. Distributors’ systems are based on masses of people being  able to 
quickly compare prices across multiple carriers.  
“It’s a very complex debate that has been building over the past three or  
four years, particularly as ancillary services and fees have become 
increasingly  important to an airline’s bottom line,” said Douglas Quinby, senior 
director at  travel researcher PhoCusWright in Sherman, _Connecticut_ 
(http://topics.bloomberg.com/connecticut/) .  
Airline fees generated $8.69 billion in the 12 months that ended Sept. 30, 
10  percent more than a year earlier, according to the U.S. Bureau of 
Transportation  Statistics. The total includes bag and rebooking charges and 
excludes payments  for seat assignments, pillows, blankets and food, according to 
BTS.  
Single Price Displayed 
The charges aren’t included in data AMR provides to distributors such as  
Sabre and Travelport LLC, which sell the information to traditional travel  
agents and online outlets such as _Expedia  Inc. (EXPE)_ 
(http://www.bloomberg.com/quote/EXPE:US)  Agents are unable to make quick fee calculations in 
the single  price they display for consumers.  
“We do not support _government regulation_ 
(http://topics.bloomberg.com/government-regulation/)  that requires us to give content, of  any sort, to the 
global distribution systems,” AMR’s American said in a  statement.  
Sabre, a former AMR unit, wants the Transportation Department to require  
carriers to provide “core” fees for seats, bags and priority boarding, Chief 
 Executive Officer Sam Gilliland said in an interview.  
The rule may go forward in light of LaHood’s willingness to regulate an 
_airline  industry_ (http://topics.bloomberg.com/airline-industry/)  “the 
consumer isn’t real happy about,” said George Hamlin,  president of Hamlin 
Transportation Consulting in Fairfax, Virginia. “We have  sort of creeping 
reregulation.”  
LaHood’s History 
LaHood imposed a 2010 rule that fines carriers for failing to let customers 
 off planes stuck on the tarmac for three hours. A second round of rules 
raised  payments for involuntarily bumped passengers, applied tarmac fines to 
overseas  flights and required fare advertisements to include government 
taxes.  
Fee-disclosure requirements are under consideration for the agency’s third  
round of rulemaking, General Counsel Robert Rivkin said. The proposed rules 
are  due in August.  
“Our general principles are that we want consumers to be able to easily  
determine the full price of their air transportation before they travel,” 
Rivkin  said.  
Expedia, the biggest online travel agency by gross bookings, wants the  
information published alongside fares by the Airline Tariff Publishing Co., or  
ATPCO, which provides fare data for more than 450 carriers worldwide, said 
Glenn  Wallace, Expedia’s vice president of transport strategy. It doesn’t 
want the  government involved, Wallace said.  
‘Need a Spreadsheet’ 
Fees are so numerous “you need a spreadsheet” to keep track, said _Kevin  
Mitchell_ (http://topics.bloomberg.com/kevin-mitchell/) , chairman of 
Radnor, Pennsylvania- based Business Travel Coalition,  a trade group for 
corporate travel managers. Consumers are frustrated not  knowing charges, and 
businesses can’t track costs, he said.  
Airlines have urged the Transportation Department in meetings not to force  
sharing of fee data, and American and _US  Airways Group Inc. (LCC)_ 
(http://www.bloomberg.com/quote/LCC:US)  brought antitrust lawsuits against 
distributors in  2011. Southlake, Texas-based Sabre and Travelport denied the 
charges and some  claims later were dismissed. Trials are pending.  
“This is essentially a contractual relationship carriers have” with  
distributors, said Sharon Pinkerton, senior vice president of policy at the  
Airlines for America trade group, whose members include _Fort Worth_ 
(http://topics.bloomberg.com/fort-worth/) ,  Texas-based American, _Delta Air Lines 
Inc. (DAL)_ (http://www.bloomberg.com/quote/DAL:US)  and _United Continental 
Holdings Inc. (UAL)_ (http://www.bloomberg.com/quote/UAL:US)   
That argument helped persuade senators to keep a fee-data provision out of  
Federal Aviation Administration legislation earlier this year, she said.  
‘Antiquated System’ 
US Airways is “happy” to have distributors and online agents sell its  
products, President Scott Kirby said. “The problem is, they don’t want to sell 
 it. They want to keep their antiquated system because it works well for 
them.  We’d love to change it and have them help us change it.”  
United Continental declined to comment and Delta referred calls to  
Washington-based Airlines for America. They are the largest full-service U.S.  
airlines, followed by American and Tempe, Arizona-based _US Airways_ 
(http://topics.bloomberg.com/us-airways/) .  
Travel agents would prefer using distributors to get fee data rather than  
creating separate technology channels with each carrier, said _Henry  
Harteveldt_ (http://topics.bloomberg.com/henry-harteveldt/) , chief research 
officer at Atmosphere Research Group LLC in _San  Francisco_ 
(http://topics.bloomberg.com/san-francisco/) .  
“The DOT is going to tell the airlines, you may want to be able to withhold 
 these, but they are so critical that someone in the travel agency channel 
has to  have access,” Harteveldt said.  
American last year reached an agreement to provide flight and fare data  
directly to Priceline.com. Even with such arrangements, 58 percent of tickets  
sold last year were through agents using distributors, according to  
PhoCusWright.  
Former AMR CEO Robert Crandall said that while he opposes government  
intervention, airlines should provide fees to distributors and “avoid  
unnecessarily irritating customers.”  
Jay Sorensen, a former Midwest Airlines marketing director, suggested that  
airlines and data distributors may be able to thrash out their differences 
as  the technology to reach consumers evolves and carriers seek new ways to 
stay  profitable.  
“It is an industry and a marketplace in transition and that makes for a 
messy  situation,” said Sorensen, who is now president of consultant Ideaworks 
in  Shorewood, _Wisconsin_ (http://topics.bloomberg.com/wisconsin/) . 
Government should “step out of the way for a while  and let this stuff settle.”  
To contact the reporters on this story: _John Hughes_ 
(http://topics.bloomberg.com/john-hughes/)   in Washington at _jhughes5 at bloomberg.net_ 
(mailto:jhughes5 at bloomberg.net) ; Mary Schlangenstein in Dallas at 
_maryc.s at bloomberg.net_ (mailto:maryc.s at bloomberg.net)