April 30, 2013
The Honorable Ray LaHood Secretary
U.S. Department of Transportation 1200 New Jersey Avenue, SE Washington, Dc 20590
Re: Docket No. OST-2013-0048 – International Air Transport Association Resolution 787 Dear Secretary LaHood:
We the 214 undersigned government, university and corporate travel managers, travel management companies (TMCs), industry associations and other stakeholders from six continents and nineteen countries, who represent millions of travelers, urge the U.S. Department of Transportation (DOT) to reject Resolution 787, and the included New Distribution Capability (NDC), as it contravenes the public interest. NDC represents a new, worldwide business model for the pricing and sale of airline tickets that could structurally change the industry in unalterable ways adversely impacting all supply-chain participants. We were excluded from IATA proceedings that led to the creation of Resolution 787, and therefore, rely on the Department to protect our interests.
A single firm, if not dominant, is usually free under national competition laws to endeavor to change an industry’s economic and operational models. It is a horse of a different color, however, when 240 horizontal competitors strategize behind closed doors and agree upon a new business model for the pricing and sale of their products. We firmly believe that horizontal airline competitors (and indeed nearly the entire industry) banding together to jointly adopt such a new business model by express agreement crosses the line. NDC is an agreement that has the purpose and would have the effect of stabilizing or raising prices charged to all consumers because it would end the air fare transparency that, as the airlines themselves have confirmed, has checked their ability to raise prices. It thus likely violates U.S. and other countries’ antitrust laws.
This new business model would also violate privacy rights. Resolution 787 explicitly says that, before fares are quoted, airlines have the right to demand from consumers personal information that “includes but is not limited to” the customer’s name, age, marital status, nationality, contact details, frequent flyer numbers (on all carriers), prior shopping, purchase and travel history and whether the purpose of the trip is business or leisure. There can be no legitimate justification for charging a traveler more or less based on a number of these items of personal information (such as marital status or nationality), and many of them by design can be used to pinpoint and extract higher prices from those travelers who are likely to be less price sensitive, such as business travelers.
Importantly, IATA has been silent on required industry investments to implement NDC, or which participants would be responsible for such costs, i.e. airlines, global distribution systems, travel agencies or organizations with managed-travel programs. However, most observers believe the NDC-associated costs to be substantial and that these costs would be passed on to the customer in the form of higher TMC transaction fees, or surcharges. Process costs and inefficiencies related to NDC complexities would also be externalized to TMCs and their clients.
Given the potential anti-competitive and anti-consumer effects of Resolution 787, the unprecedented invasion of privacy for consumers and the added implementation and ongoing NDC-related costs to the industry and its customers, DOT should deny its approval.
Respectfully submitted,
Transportation Appeals Tribunal of Canada Scottish Passenger Agents' Association Air Passengers Association of India
Brazilian Travel Agencies Association (ABAV) Association of Canadian Travel Agencies (ACTA) American Society of Travel Agents
Association for Airline Passenger Rights FlyersRights.org
Consumer Travel Alliance Business Travel Coalition
The Travel Company Edinburgh (Scotland UK) Continental AG (Germany)
ABRACORP (Brazil)
Atlantis Air Service (Czech Republic) ZF Friedrichshafen AG (Germany)
UNIGLOBE Normark Travel Inc. (Canada) Procurian (Brazil)
UCB Pharma (Belgium)
Flightline Travel Management (United Kingdom) Nomad Travels (India)
Adidas Group (Germany) TRAVELORAMA (CYPRUS) AWise (Netherlands)
Roberta's Travel Solutions (Trinidad and Tobago) QA Business Travel (UK)
Viatur Travel Services (Costa Rica) NaranTours LLC (Mongolia)
Wings Travel (Zimbabwe) Abav SP (Brazil)
Alpi Viajes C.A. (Venezuela)
Cresta World Travel (United Kingdom)
MTU Friedrichshafen GmbH / Tognum AG (Germany) Wayte Travel Management (United Kingdom)
TierOne Travel (Canada)
Barrhead Travel (United Kingdom) Sportscorp Travel (Canada)
Tourvest Travel Services (South Africa) MKI Travel (Canada)
Redfern Travel Ltd (UK) Maduro Travel (Curacao)
VEMSA LalianXa Travel Network (Costa Rica) Valtours Ltd (Iceland)
Lempira Tours (Honduras) Saint Joseph's University
The George Washington University University of Delaware
Travizon
Home Box Office, Inc. Ovation Travel Group, Inc. Travel Store, Inc.
Valerie Wilson Travel Wells Fargo & Company MICROS Systems, Inc. J.C. Penny
Royal Caribbean International BCD Travel
Constellation Brands Ralph Lauren Corp. Dollar Tree Stores
Western Digital Technologies, Inc. FreemanWhite, Inc.
Makino, Inc. CH2M HILL
Epic Systems Corporation Autoliv Americas
Nationwide Intelligence Hickory Global Partners Travel and Transport The Travel Team, Inc. World Travel, Inc.
BTI The Travel Consultants HealthCare California Autodesk, Inc.
Nike, Inc.
Lighthouse Consulting Partners, Inc ZOLL Medical
CFA Institute FAC
Wyndham Jade
Lumbermens Merchandising Corp. Purcell Systems, Inc.
Goss International Cameron
TravelStore, Inc. Sun Travel, Inc. Stephens
Holiday Travel American Express International Travel Management Sandbach Holdings LLC
Carroll Travel All-Travel
Katherine Christensen & Associates, Inc. Hidden Treasure Tours, Inc.
Computershare LLC Buon Viaggio Travel A Plus Travel Corporation
Travel Management Partners, Inc. Caldwell Travel
Acendas
A & I Travel Management, Inc. Advent Travel Leaders
Colwick Travel Cannon Design
down2earth adventures, LLC Peak Travel Group
Accent Travel / Milbern Travel Inc. Country Place Travel, Inc.
Sanditz Travel Management Antietam Travel Service, Inc. Sunset Travel Agency
Professional Travel, Inc. FindingTheBetterWay.com COLPITTS WORLD TRAVEL Mann Travels
Far Horizons Travel
CROWN INTERNATIONAL TRAVEL, INC. ADTRAV Travel Management
Travel Leaders/Travelinc LLC MSW Travel Group
CI Travel
Premiere Travel Mean Green Travel Conlin Travel
The Remington Group Geraci Travel
Guardian Travel, Inc FHI 360
Up and Away American Express Travel Alert Logic
Christopherson Business Travel Maupin Travel Inc.
Frosch-GlobalPoint LLC Child Travel Services Anthony Travel, Inc. Clarksburg Travel Covington Travel
Metro Travel & Tours, Inc. Fox World Travel
Travel One, Inc.
Breton Village Travel Services Inc S.R. Travel Service
Montrose Travel
Sterling Vacations Anolik Law Corporation
Midwest Travel Consultants, Inc. Global Travel Ltd
Alpine Travel of Saratoga
ROMANIAN TOURS & TRAVEL MSP Travel Group
Independent Travel
ILLUMINATION VACATIONS Awesome Cruises & Tours The Performance Group TL Global Travel Inc. Travel Concepts
M.O. Air International, Inc. Compass Travel Carmax El Sol Travel Unbridled Travel Menno Travel JRF Voyages
LXR Travel, LLC an affiliate of Travel Experts
Hamilton, Miller, Hudson and Fayne Travel Management Corp. Century Travel
Creative Group, Inc. Maritz Travel Company HMHF Travel Mgt. Co. Travel Centre
Chamberlin Enterprises, Inc. DBA Chamberlin's Travel OSI Systems, Inc.
Promega Corporation Bursch Travel
ALASKA TRAVEL SOURCE Travel By Gagnon
Kamla Int'l Inc, dba Maazda Travel Travel Leaders Indianapolis
World Travel Service, Inc. IDEXX Labs
Diplomat Travel Services Travel Leaders/Travelmore All Direct Travel
Changing Planes
Rawhide Travel and Tours, Incorporated of Arizona Hariworld Travel Group, Inc.
Cassis Travel Services, Inc. Berkeley's Northside Travel Technicolor
Innovative Travel
Azumano Corporate Travel BlueLinx Corporation Conference & Travel
Travel Experts, Inc. Travelaudits, Inc.
BatteryTravel Assoicates Altour
Davidson Kaplan Consultants
Travgroup.com a Burekhovich Travel Company S & P Travels and Tours
Paul Klein Travel
Hope's Travel,Inc. dba ADA Travel Lindberg Travel
Moorpark Hotel Pederson Consulting Provisur Technologies, Inc. WorldTravelService
Chamberlin's Travel Travelsavers, Inc. Travel Leaders
CLG Travel Management Suzi Davis Travel, LTD
