A Closer Look: Barriers to Consumer Access to Airline Ancillary Fees: It is not the Technology
July 31st, 2012 • By: Joseph Rubin, President, Interactive Travel Services Association
There has been a recent uptick in media stories about the increased costs associated with flying, and about the frustration consumers often face when dealing with airline ancillary fees like baggage and seat reservation fees. While airline ticket prices have generally increased more slowly than inflation, ancillary fee revenue increased 66% from 2009 to 2011 to more than $22 billion. While these additional fees have left many passengers frustrated and angry, a significant aspect of this frustration could be resolved if the airlines would provide consumers with the opportunity to see, compare and buy air travel on a total, all-in price basis.
Unfortunately, even though many carriers throughout the world have made ancillary fee information available to consumers through various distribution channels, such as online travel agencies, U.S. airlines have vigorously resisted restoring comparison-shopping for their customers.
This lack of ancillary fee transparency has persisted for more than four years and has gotten to a point where only a regulatory requirement that the airlines disclose this information to third-party distribution channels will restore consumers’ ability to compare all-in airline fares across airlines.
While the trade associations for the airlines have claimed that they support transparency in airline consumer pricing, their actions speak louder than their words as they have opposed proposals that would require the disclosure of the all-in cost of airfare.
One of their purported reasons for opposing real transparency is that they claim that the U.S. ticket distribution systems can’t operate in the way that airlines require.
However, evidence from around the world squarely refutes this claim and demonstrates how quickly, easily, efficiently and inexpensively such ancillary fee information could be made available to consumers.
For example, the very same distribution companies the airlines trade associations attack operate many of the information technology, inventory and pricing systems of airlines around the world that are today pioneering consumer merchandising. In other words, existing systems could easily provide these services for airlines that have refused to provide these data to consumers. Further, there are technological solutions that are already in place today that could provide real-time, all-in comparison-shopping for consumers.
For example, the Airline Tariff Publishing Company (ATPCO), an organization created by the airlines, has had the infrastructure in place to display ancillary services in virtually all travel sales channels since 2010. Unfortunately, the airlines have refused to provide the fee data to power up the system. This could be accomplished quickly, as the distribution companies are ready and waiting for these data.
Third party ticket distribution systems pioneered transparency in the airline marketplace, enabling consumers to make informed purchase decisions after comparing fare and schedule offerings efficiently, in real time, across multiple carriers. This ability to comparison shop has kept airfares competitive and democratized air travel for virtually all consumers – a hallmark of airline industry deregulation. Implementing such a system for ancillary fees would reestablish airfare transparency for consumers, and could be accomplished quickly and efficiently with systems that are already in place.