DOT notice on ancillaries leaves issue open for debate

By Bill Poling

Traveler with luggageIt sounds simple. Travel agents want airlines to share information about their ancillary services and fees in all sales channels so that intermediaries such as agents and online travel agencies can provide this information to their customers and, ultimately, book them.

The Transportation Department (DOT) has finally addressed that issue head-on in its recent consumer rulemaking notice, but it has done so in a way that is anything but simple.

The DOT is asking for comment on its proposal, but agents or others in the industry who read the DOT fine print might discover more than they expect. The DOT asked for industry and consumer comment on scores of related questions that could take months if not years to sort out.

On the underlying issue of getting ancillary information into the agency channel and in front of consumers, the DOT proposed two alternate versions of a rule, limited to certain specific ancillary services and coupled with a detailed disclosure requirement.

As a result, the proposal about ancillaries and all its variations and explanations takes up 27 of the 118 pages in the DOT rulemaking notice and involves dozens of questions that consumers and industry officials are invited to address.

As for the underlying concept — requiring airlines to share the data with agents — the DOT stopped short of the goal of requiring all ancillaries to be available and bookable at all points of sale.

Instead, the DOT chose to focus on four core ancillary services that were traditionally included in the base fare and that it believes to be “intrinsic to air transportation.”

These are fees for carry-ons, first checked bags, second checked bags and seating assignments. This limitation reflects the DOT’s view that “not all ancillary service fee information needs to be available through all channels.”

The DOT proposed two alternate versions of such a rule.

In the first version, U.S. and foreign airlines would distribute information on the four ancillaries to all GDSs in which they participate and to all intermediaries authorized to display or sell their services. This would include metasearch sites such as Kayak and Google.

In the second version, airlines would be required to distribute information on the four core ancillaries only to agents that act as points of sale, but not necessarily through GDSs.

Under this version, airlines would not be required to distribute the data to GDSs or to metasearch sites that lack a booking feature, such as Kayak and Google.

In neither version would an airline be required to distribute the information to intermediaries that it does not authorize, and in neither version would an airline be required to make the ancillary services bookable by the agent.

Although agents have been demanding access to this data for years, and are presumably eager to share it with clients, the DOT concluded that it needs a rule compelling agents to disclose the information to clients. It also wants to specify how the disclosure must be made.

The disclosure requirement would apply to airlines and selling agents. Their websites would be required to display the fees for the four core ancillaries “by a link or rollover” on the first page that displays a fare in response to a specific flight search, “adjacent to the fare information.”

Alternatively, the DOT asked for comment on whether the disclosure should be required “only upon the consumer’s request.”

A related open question is whether the disclosure would apply to displays that are not public, such as those used by “corporate travel agents.”

In any event, the disclosure would have to be “itinerary-specific” in the case of agents and “customer-specific” for airlines, meaning the carrier would have to disclose the specific fees that apply to the passenger’s method of payment, fare class, personal status (for example, military) or frequent flyer level, to the extent the customer provides that information.

Agents and online travel agencies would not be required to include these status-related variations, but they would be required to “clearly and prominently disclose that these fees may be reduced or waived based on the passenger’s frequent flyer status, method of payment or other characteristic.”

While the DOT generally tries to steer clear of regulating prices, it ventured into that arena on one point related to this proposal, saying it intended to prohibit GDSs from “imposing charges for the distribution of ancillary service fee information that are separate from or in addition to the existing charges for the distribution of fare information.”

That language would apparently prevent a GDS from charging airlines for displaying ancillary data. ASTA fears that it might also prevent agents from imposing a service fee for booking ancillaries in the event they become bookable.

Although the DOT indicated that it is predisposed to adopt a regulation along these lines, the document clearly indicates that many aspects of the rule are still wide open for discussion.

For example, the DOT invited comment on whether data on other ancillaries should be included or whether websites should use other methods of displaying them.

It also asked for comment on whether it should set technical standards, such as XML protocols, for airlines to follow in transmitting ancillary fee data to intermediaries.

And while the DOT is not proposing to require that any ancillaries be bookable, it noted that it has “not closed the door” on the question and specifically asked commenters to address it.

Virtually everything in the rulemaking, in other words, is open to debate, including “any innovative alternatives/solutions that the Department may not have considered.”

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Photo of traveler with luggage courtesy of Shutterstock.com. 

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