A Closer Look: Disclosing ancillary fees benefits airlines and their customers
The battle that the airlines are staging regarding nondisclosure of ancillary fees is a strange one. That factor was on display vividly during the last meeting of the U.S. Department of Transportation (DOT) Advisory Committee on Aviation Consumer Protections (ACACP) held on August 7th. Airlines were given time to discuss financial positions, new technology and new IATA development language to facilitate disclosure of ancillary fees. Their presentations all claimed that they want to disclose these fees.
But, somehow they are not — at least consumers and travel agents aren’t seeing these ancillary fees in a useful manner, nor are they allowed to purchase these services except through airline websites.
Corporate travel managers attending the committee hearing were confused after hearing the airlines profess to want nothing more than to sell these ancillary fees including baggage, seat-reservations and everything else that they can through their entire distribution network. They clearly stated that if the airlines could not figure out how to inform them of ancillary services and fees so that they could fully budget for travel and reimburse travelers, their option was to push DOT for regulatory action.
From a consumer’s point of view, I finally commented that with the airlines claiming that they have already disclosed virtually every ancillary fee mentioned in discussions, where were they disappearing? Into a black hole?
For every airline executive that claimed their corporate desire to disclose ancillary fees and airline representative that claimed most fees were already fully disclosed, there were thousands of travel agents and scores of travel management companies represented that don’t seem to be getting this ancillary services and fees information.
The best news to come out of the ACACP meeting was the demonstration of technology to handle scores of ancillary fees with all of their iterations. Technology company Farelogix showed how, given use of airline data, software and travel agent platforms have been created that can provide detailed ancillary fee data for travel agents and allow for transactability.
Global distribution company Sabre dramatically announced that they would not charge airlines anything for distribution of the ancillary fee data through their distribution network to travel agents. Of course, travel agencies will have to negotiate with the airlines regarding selling this data.
Furthermore, Sabre demonstrated their new travel agent platform, Sabre Red, that has modules and comparison-shopping software to allow consumers to see and compare prices across airlines including the most important ancillary fee data. Sabre’s demonstration software was run using ancillary fee data taken from the airline-owned Airline Tariff Publishing Company and scraped from airline websites.
Once airlines learn about the power of their distribution network, including travel agents and corporate travel managers, in selling the basic ancillary fees — baggage fees and seat-reservations — they are sure to begin bundling their fees into special business and leisure packages to make travel more convenient for passengers. These packaged ancillary fees will allow airlines to customize their offerings based on the type of passenger and will allow them to sell to their customers throughout their distribution network.
Business travelers might find themselves offered a package including early boarding, WiFi access for email and Web surfing, lounge access, pillows and blankets for red-eye flights and a meal.
Leisure travelers might be offered early boarding for families and reduced family seat-reservation charges to help keep families together. They may select pillows and blankets as well as free WiFi that links to the airline’s entertainment network and unlimited sodas and snacks.
The DOT officials who will be front and center during the creating of the upcoming proposed rulemaking that will be dealing with disclosure of ancillary fees were listening carefully. If the airlines and GDSs do not figure out a way to work together for the good of the consumers, DOT may nudge them in the direction of cooperation.
Once airlines cease shrouding their ancillary fee data, they will be able to reap the benefits of providing customized services to passengers that will make travel even more pleasant. It doesn’t get much better than that. Airlines can serve up ancillary services that passengers want, sell those services throughout the distribution network and improve customer service.
It sounds like a winning combination to me.