For many passengers, air travel is only about finding the cheapest fare.
But as airlines offer a proliferating list of add-on services, from early boarding to premium seating and baggage fees, the ability to comparison-shop for the lowest total fare is eroding.
Global distribution systems
that supply flight and fare data to travel agents and online ticketing
services like Orbitz and Expedia, accounting for half of all U.S. airline tickets,
complain that airlines won't provide fee information in a way that lets
them make it handy for consumers trying to find the best deal.
"What other industry can you
think of where a person buying a product doesn't know how much it's
going to cost even after he's done at the checkout counter?" said Simon
Gros, chairman of the Travel Technology Association, which represents the global distribution services and online travel industries.
The harder airlines make it for
consumers to compare, "the greater opportunity you have to get to higher
prices," said Kevin Mitchell, chairman of the Business Travel
Coalition, whose members include corporate travel managers.
Now the Obama administration is
wading into the issue. The Department of Transportation is considering
whether to require airlines to provide fee information to everyone with
whom they have agreements to sell their tickets. A decision originally
scheduled for next month has been postponed to May, as regulators
struggle with a deluge of information from airlines opposed to
regulating fee information, and from the travel industry and consumer
groups that support such a requirement.
Meanwhile, Spirit Airlines, Allegiant Air and Southwest Airlines
— with backing from industry trade associations — are asking the
Supreme Court to reverse an appeals court ruling forcing them to include
taxes in their advertised fares. The appeals court upheld a Transportation Department
rule that went in effect nearly a year ago that ended airlines' leeway
to advertise a base airfare and show the taxes separately, often in
smaller print. Airlines say the regulations violate their free-speech
rights.
At the heart of the debate is a
desire by airlines to move to a new marketing model in which customers
don't buy tickets based on price alone. Instead, following the well-worn
path of other consumer companies, airlines want to mine personal data
about customers in order to sell them tailored services. You like to sit
on the aisle and to ski, so how would you like to fly to Aspen with an
aisle seat and a movie, no extra baggage charge for your skis, and have a
hotel room and a pair of lift tickets waiting for you, all for one
price? You're a frequent business traveler. How about priority boarding,
extra legroom, Internet access and a rental car when you arrive?
"Technology is changing rapidly.
We are going to be part of the change," said Sharon Pinkerton, vice
president of Airlines for America, which represents most U.S. carriers.
"We want to be able to offer our customers a product that's useful to
them, that's customized to meet their needs, and we don't think (the
Transportation Department) needs to step in."
If airlines have their way,
passengers looking for ticket prices may have to reveal a lot more
information about themselves, such as their age, marital status, gender,
nationality, travel history and whether they're flying for business or
leisure. The International Air Transport Association, whose 240 member
airlines cover 84 percent of global airline traffic, adopted standards
at a meeting earlier this month in Geneva for such information gathering
by airlines as well as by travel agents and ticketing services that would relay the data to airlines and receive customized fares in return.
"Airlines want, and expect, their
(ticket) distribution partners to offer passengers helpful contextual
information to make well-informed purchase decisions, reducing the
number of reservations made based primarily or exclusively on price,"
said a study commissioned by the association.
Consumer advocates question how
airlines would safeguard the personal information they gather, and they
worry that comparison shopping for the cheapest air fares will no longer be feasible.
"It's like going to a supermarket
where before you get the price, they ask you to swipe your driver's
license that shows them you live in a rich zip code, you drive a BMW, et
cetera," Mitchell said. "All this personal information on you is going
out to all these carriers with no controls over what they do with it,
who sees it and so on."
The airline association said
consumers who choose not to supply personal information would still be
able to see fares and purchase tickets, though consumer advocates said
those fares would probably be at the "rack rate" — the travel industry's
term for full price, before any discounts.
It's up to individual airlines
whether they price fares differently for travelers who don't provide
personal information, said Perry Flint, a spokesman for the
international airline association.
The stakes, of course, are
enormous. Since 2000, U.S. airlines have lost money for more years than
they've made profits. Fee revenue has made a big difference in their
bottom lines. Globally, airlines raked in an estimated $36 billion this
year in ancillary revenue, which includes baggage fees and other a la
carte services as well as sales of frequent flyer points and commissions
on hotel bookings, according to a study by Amadeus, a global
distribution service, and the IdeaWorksCompany, a U.S. firm that helps
airlines raise ancillary revenue. U.S. airlines reported collecting
nearly $3.4 billion in baggage fees alone in 2011.
One expense airlines would like
to eliminate is the $7 billion a year they pay global distribution
systems to supply flight and fare information to travel agents and
online booking agents like Expedia. Airlines want to deal more directly
with online ticket sellers and travel agents, who dominate the lucrative
business travel market. Justice Department officials have acknowledged
an investigation is underway into possible anti-trust violations by
distribution companies.
Airlines also have been cracking
down on websites that help travelers manage their frequent flier
accounts. The sites use travelers' frequent flier passwords to obtain
balances and mileage expiration dates, and then display the information
in a way that makes it easier for travelers to figure out when it makes
more sense to buy a ticket or to use miles.
"What the airlines are trying to
do right now is reinvent the wheel so they can hold all their
information close to their chest," said Charles Leocha, founder of the
Consumer Travel Alliance. "As we move forward in a world of IT, the
ownership of passenger data is like gold to these people."
By withholding information like
fee prices, he said, "we are forced to go see them, and then we are
spoon-fed what they want to feed us."
1 comment:
The online booking of air tickets saves a lot of time and energy. You can easily book an air ticket from literally anywhere.
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