ASTA writes regarding your April 30 editorial titled "Dear Mr. Secretary" in which you supported the airline position that the government should not require airlines to share ancillary fee information on a transparent and transactable basis with GDSs. You further identified the pro-agent position as "ASTA's proposal."
Travel Weekly is certainly entitled to its opinion, but we strongly disagree with it.
To be clear, the proposal to require the airlines to ensure that travel agents are able to fully inform their clients about ancillary fees and to sell them is not just an ASTA proposal. It is a long-held position of a large and broad coalition of consumer groups, corporate travel consumers and travel agencies as well as the GDSs themselves: Open Allies for Airfare Transparency (www.faretransparency.org).
The coalition's position is driven by the marketplace reality that the airlines have refused to share ancillary fee information through the same channels they use to distribute airfares, rejecting the demands of their largest and best customers who want this information to flow through the integrated purchasing processes they depend upon, the GDS pipelines.
That is the market distortion going on here, a market failure that requires federal intervention to ensure that consumers continue, in the increasingly complex unbundled marketplace, to enjoy the benefits of comparative price-shopping with ready access to the full price of travel, including all optional services they might want.
That is the only way the market is likely to bring competitive discipline to the rising and ubiquitous fee regime that the airlines have created.
The continued proliferation and escalation of ancillary fees signals a failure of competitive discipline. Ensuring that independent distributors, whose share of air sales exceeds 50%, have robust and meaningful access to, and the ability to sell, ancillary services, and the ability to provide a complete and final transaction to consumers who prefer to buy from them, is the only way to restore market forces to this sector.
There is no need to worry about the fate of the airlines. Since GDS deregulation in 2004, the major U.S. airlines have acknowledged that they have attained substantial discounts on booking fees. For example, American Airlines stated in 2010 that its domestic booking fees (accounting for the vast majority of its bookings) fell by 34% between 2005 and 2009.
GDSs have lost market share for several years to airline direct sales; the three GDSs now collectively account for fewer than 50% of airline bookings in the U.S. vs. more than 75% several years ago.
Nor can anyone rely for a solution on mediation by the Department of Transportation, a process that in this context has no statutory basis nor hope of success. As for the issue of near- and long-term benefits, everyone with the interests of consumers at heart should be concerned about the fate of independent distribution and the consumers who prefer to deal with it, if airlines succeed in withholding transactable fee information accounting for half or more of the price of an airline ticket.
Tony Gonchar, CEO
ASTA
Alexandria, Va.
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