Tuesday, March 20, 2018

EDITORIAL: The flying public deserves an open, honest debate on airline distribution practices

By Kevin Mitchell, Founder
Business Travel Coalition

The American people deserve to know the facts on pricing practices of one of the most expensive services – air travel – that they buy. Legislation from U.S. Senator Susan Collins of Maine will provide that opportunity and should be enacted into law.>

Since the time of computerized reservations systems, there have been two ways to buy a plane ticket. The traveler can buy directly from an airline, which looks out for itself. Or, the traveler can buy from an independent travel agent, which looks out for the traveler. The U.S. Department of Transportation (DOT) had to intervene multiple times to keep things fair, such as when airline computer reservations systems used by ininforma.comdependent travel agents showed a display bias toward one carrier or another.

In the 1990s, the carriers began weakening consumers’ ability to obtain independent information by cutting, capping and then eliminating travel agent commissions. The advent of the internet introduced online travel agents, and the airlines didn’t like that either. So, they banded together to create their own online travel agency, which they later sold.

Kevin Mitchell
Founder, BTC
Today, the U.S. airline industry has consolidated into an oligopoly of four airlines that control some 80 percent of the market. Carriers know that consumers don’t have many choices, if any. There may be only one airline offering nonstop service, or just one or two carriers serving a traveler’s destination.

The airlines are working to eliminate providers of independent travel information through actions including withholding schedules from consumers’ favorite travel websites, or refusing to allow them to display airfares, which are public information. Some airlines actually demand that travel websites pay the airline for helping them sell you a plane ticket. You read that correctly – the airlines not only want to collect the price of the ticket from you, but on top of that, they want the travel website - that enabled you to easily compare all of your options before selling you a ticket - to pay the airline, too.

In Oct. 2016, DOT decided that airline distribution practices required a closer look. It issued a request for information (RFI) and gave the airlines two months to respond. The airlines managed to postpone the deadline by three months, hoping they would have better luck with the next administration. It paid off. On March 10, 2017, despite the fact that 58,000 individual travelers, consumer and business groups submitted comments calling for action, DOT suspended the RFI without a single step taken to protect consumers.

But a suspension wasn’t enough for the airlines. In Dec. 2017, in response to a DOT regulatory review, the airline industry asked that the RFI be permanently terminated. A4A’s filing characterized termination of the RFI as a high priority and placed it at the top of their wish list of basic, reasonable consumer protections they’d like the DOT to eliminate for them.

U.S. Senator Collins has introduced legislation that would lift the suspension on DOT’s request for information, allow its completion and bring the facts into the open for the public and all stakeholders to consider.

The airline oligopoly is fighting reinstatement of the RFI as if the very survival of their companies depended on it. What are they afraid of? What do they have to hide? If the airlines are truly confident in their position, they should embrace the opportunity to make their case, not try and eradicate it.

We believe in a healthy, competitive, market economy with rules of the road and a referee to ensure the system is fair to businesses of all sizes and to all stakeholders, not just a few industry behemoths. That means related travel businesses, and the consumers and businesses that rely on the airline industry.

While the airlines have a right to their opinion, they don’t have a right to deprive us of an essential, honest discussion about an issue important to American consumers, businesses, tourism and the larger economy.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



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