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Business Travel Coalition (BTC) issued the following statement regarding the public-policy implications of the antitrust lawsuit filed by American Airlines against Travelport and Orbitz in a federal court in Texas.
Statement
Consumers and corporate managed travel programs are being used as pawns by an airline once again. This American Airlines’ (American) antitrust lawsuit against Orbitz and Travelport is not a path to resolving the overarching problem that the marketplace does not embrace American’s so-called direct-connect proposal. Rather, the lawsuit is another major symptom pointing to a failure in the marketplace for commercial airline services.
Nothing about this American lawsuit brings consumers closer to their need for access to full fare and fee information. Expensive and years-long court proceedings can only throw into doubt hope of progress in restoring comparative shopping of all-in travel prices for the 50% of consumers and virtually all corporate managed travel programs that purchase airline tickets through the travel agency sales channel.
With strong direction from the U.S. Congress, the Department of Transportation (DOT) must act now to address this problem by promulgating a rule requiring airlines to disclose ancillary fee information (e.g., checked baggage charges) in the same electronic and transactable formats used to publish airfares themselves.
For two and one-half years, despite major corporations’ substantial collective purchasing power and their continuing calls for full disclosure of fee data, airlines have refused to provide the travel agency sales channel with this vital information. This refusal is well-defined evidence of a marketplace that is not functioning properly.
Importantly, because of U.S. federal preemption in the aviation sector, consumers have virtually no access to legal protections afforded by state consumer protection laws. Likewise, the Federal Trade Commission has no authority in this arena. As such, DOT is the last bastion of consumer protection and has existing authority through Section 41712 of the Federal Aviation Act to address unfair and deceptive practices by requiring full disclosure of fee data. DOT has exercised this authority in the past by requiring airline code sharing and change-of-gauge information to be shared through the global distribution systems with travel agencies and consumers.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
