PETITION OF THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. TO DEFER IMPLEMENTATION AND FOR CLARIFICATION OF RULES

Transcription

1 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ) ENHANCING AIRLINE PASSENGER ) PROTECTIONS ) Docket No. OST ) PETITION OF THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. TO DEFER IMPLEMENTATION AND FOR CLARIFICATION OF RULES Communications with respect to this document should be addressed to: Paul M. Ruden, Esquire Senior Vice President Legal & Industry Affairs American Society of Travel Agents, Inc King Street Alexandria, Virginia Tel. (703) Fax (703) pruden@asta.org July 6, 2011

2 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ) ENHANCING AIRLINE PASSENGER ) PROTECTIONS ) Docket No. OST ) PETITION OF THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. TO DEFER IMPLEMENTATION AND FOR CLARIFICATION OF RULES The American Society of Travel Agents, Inc. (ASTA) 1 respectfully petitions the Department to defer the implementation of two rules adopted in the referenced proceeding and scheduled to become effective August 23, 2011, 76 Fed. Reg , April 25, 2011, until the Department concludes the supplemental rulemaking on disclosure and access to ancillary fees described at 76 Fed. Reg The rules, described further below, are the baggage fee disclosure rule of section (b) and the e-ticket confirmation rule of section (c). We also request clarification of the meaning and application of section (c). We are aware of the requests for extension of implementation dates filed by various domestic and international airline associations. Our request differs from those in that we believe 1 ASTA is the world s largest association of professional travel agencies. Its membership includes travel agency companies of the traditional, on-line and hybrid varieties, as well as individual travel agents and many others engaged in aspects of retail and wholesale distribution of transportation services. 1

3 the issues presented by the cited rules are not resolvable merely by taking more time to accomplish the technical tasks of implementation. While ASTA applauds and supports the direction the Department has taken regarding more robust consumer protection rules, and for that reason files this petition reluctantly, the desire for speedy action regarding airline practices related to baggage fees should not override the goals of providing an efficient, non-repetitive process for implementing all of the rules related to ancillary fees and avoiding commercial harm to retail firms that support such robust consumer protection rules. Travel agencies will experience most of the same problems detailed by the airlines in their petitions. Travel agencies, like airlines, should not be required to adopt practices that are error prone, confuse passengers, and destroy efficiencies. 2 And we cannot fail to note the irony of airlines arguing that providing different baggage notice fee standards for different methods of purchase creates an uneven approach that will confuse passengers and treat regulated entities differently while strenuously resisting any regime that would require them to provide ancillary fee information to travel agencies in a useable automated format. ASTA reaffirms its strong support for the direction the Department is taking in forcing airlines to provide stronger protection for consumers who, for the most part, have no realistic alternatives to using air transportation. ASTA will continue to work constructively with the Department to fashion a regulatory regime that helps consumers, including those among the majority of travelers that want to use the skilled services of intermediaries to buy air transportation. To reach the environment that consumers want and need in a way that makes commercial sense for those firms that provide air transportation service and sales requires, as a 2 REQUEST TO CLARIFY THE FINAL RULE AND TO EXTEND CERTAIN EFFECTIVE DATES, filed by Air Transport Association of America, et al., June 7, 2011, at 5. 2

4 first principle, a single network of rules that integrate with each other and with existing and affordably attainable technologies. The two rules in question here are set out in new Section of the Statements of General Policy as subsections (b) and (c). Subsection (b) requires every travel agent with a consumer-facing website modify the operation of the site so that when a consumer selects a specific itinerary from among the options offered, the first screen quoting a fare for that itinerary must (1) state that additional baggage fees may apply to that itinerary and (2) refer the consumer to either airline websites where the actual fees can be seen or to another place within the agent s website if the baggage fee information is available there. Subsection (c) goes further it applies to all e-ticket confirmations issued by a travel agent at the completion of an online purchase or in a post-purchase confirmation. Each of these actions is required to include (1) the passenger s free baggage allowance and (2) the fee for a carry-on bag and first and second checked bags. The information must be in either (a) text form in the e-ticket confirmation document or (b) a hyperlink to an airline website where the information is displayed. The rule mandates that the fee information must be stated as specific fees applicable to that passenger s precise purchase, accounting for frequent flyer status, time of purchase and any other factor affecting the baggage charges. How this information, in this form, is to be found simultaneously at an airline website for a booking made on either an agent s website or over the phone and through a GDS booking entry is not apparent to us. We will return to this issue shortly. 3

5 I. THE BAGGAGE FEE DISCLOSURE RULE IS COMMERCIALLY RUINOUS. As is evident from ASTA s earlier comments in this proceeding, travel agents are strong supporters of comparison shopping and the full disclosure of all costs that is implied by that approach to distribution. We also believe we understand why the Department decided to advance a rule related only to baggage fees while it considered the broader and more impactful question of full disclosure and purchase of optional fees at the point and time of air fare purchase. The chosen instrument, Section (b), is, however, not well suited as an interim solution to disclosure while the larger issue is parsed. There are several reasons for this. First, the rule requires a travel agency selling air travel through a web site to take one of two steps, the first an act of commercial suicide and the second legally and commercially dangerous. The rule requires, simultaneously with the first exposure of the itinerary-specific fare, disclosure of the fact that additional baggage fees may apply to the chosen itinerary. The agency may comply by providing either a link to an airline website to see the actual fees or a link to another place within the agent s web site where the information resides. But when the agency refers its customer to the web site of a competitor, 3 the airline whose itinerary has been selected by the consumer, it is effectively inviting the customer to go away and not return. This, of course, is the approach labeled by the airline industry as the most efficient means to disclose baggage charges. 4 It may be efficient for airlines to disclose to their direct customers in this 3 We are, of course, aware of the principle that a principal and its agent do not by definition compete with each other. We are pretty sure the Department understands that this idea has no application whatever to the economic realities of air travel distribution where the principals not only compete but have made it clear they want as much of the business to come to their websites as possible. 4 REQUEST TO CLARIFY THE FINAL RULE AND TO EXTEND CERTAIN EFFECTIVE DATES, filed by Air Transport Association of America, et al., June 7, 2011, at 3. 4

6 manner but it is most assuredly not the most efficient way for travel agents to disclose to the consumers that choose to buy air travel through them. We are aware of no regulation anywhere that requires such a commercially damaging action by a retailer. There is no way, without large expense, to create such links without causing the customer to leave the agency s web site. Once departed, and aware of the baggage fees on that one airline, Airline A, the customer would have to re-enter the agency s web site and reenter all the information for the trip in order to consummate the purchase on Airline A. While doing all this, the customer will be exposed to changes in the air fare that may occur while she is reviewing the baggage fee information to discern its actual application to her itinerary. And if she is concerned about the magnitude of the charges and thinks there may be lower fees on another airline, Airline B, she will have to either return to the agency s site for a link to Airline B or move to Airline B s site directly, re-entering the search information to determine if the total cost there is more or less than the first airline. And so on to Airline C and, in some cases, D or E. The agency that sends his customer on this journey is unlikely to see the customer again. A consumer faced with the ability to see only a part of the transaction, and realizing that baggage fees alone may drastically increase the total travel price, is not likely to return to the original site to complete only a portion of the transaction. Threatened with loss of customers in such cases, agencies will try to avoid this approach, as they should. The only other option, under the rule, is for the agency to somehow acquire the ancillary fee data for all airlines and place that large volume of information somewhere on its own website with a programmed link system such that a consumer who has made at least a preliminary choice of Airline A, for example, can go directly to Airline A s ancillary fee information on the agency 5

7 website. This seems simple enough to state, but in practice it is fraught with legal and practical difficulties, making it unreasonable as a substitute for the true solution, which is airlines passing of ancillary fee information dynamically to the agent in response to booking inquiries similarly to the way that fares are delivered. The legal problem arises because there are no airlines thus far willing to commit to provide travel agencies with technically usable access to their ancillary services/fees on a dynamic basis. Therefore, the only ways an agency could acquire the information from the airlines are to (1) have someone visit each airline website and literally copy and paste (and reformat) the ancillary fee information into pages of the agency s own web site, or (2) attempt some type of web screen-scraping to capture the information in response to particular queries that are robotically entered on the airlines sites to replicate the consumer s travel request. 5 Manually obtaining the information is impractical because of the cost of manpower to achieve it initially and the manpower cost of constantly monitoring all airline websites for updates. The irony of this is inescapable thousands of man hours of work, fraught with probability of error, to manually collect information that is readily available in electronic format but deliberately withheld by airlines, a major step backward. No agency could afford to do this without significant increases in fees it charges to consumers and damage to its reputation and business every time the information turns out to be out-of-date. And customer frustration with the need to wade through pages of rules to find out what their real baggage fees are will be palpable. The second approach, web scraping, has been found illegal in every known case where it has been litigated. See the Temporary Injunction in American Airlines, Inc.v. Farechase, Inc., 5 We think this because the rule refers to actual fees and not, for example, top collections of policies regarding fees and their application. If actual fees means something else, we would appreciate the Department s clarification. 6

8 Cause No See Southwest Airlines Co. v. Farechase, Inc., 318 F. Supp.2d 435 (N.D. Texas 2004). Asking travel agencies to continually take the risk of suit by an airline over screen-scraping is too high a price to pay while the ancillary fees rulemaking is moving to conclusion. If the end result of that rulemaking is a requirement that airlines provide ancillary fee information to travel agencies through GDSs, all of the issues involving massive manual labor, error-prone procedures and risk of inaccuracies will be eliminated. If the Department chooses another path, the consequences will have to be assessed, but it should not, in the meantime, impose huge costs and high risks on the retail distribution system while it concludes its analysis of the future course. The travel agency community is not responsible for the airlines refusal to share the ancillary fee information and should not bear the costs of an interim solution. For the same reasons the Department should avoid any approach that requires the programming work to be done twice. That is a likely outcome if the Department proceeds with section (b) while the ancillary fees rulemaking moves forward over the year-plus timetable that has been established. The magnitude of programming and other costs to either manually collect and display the data or the costs to screen-scrape the information will be very large, beyond the means of most small and medium sized agencies. We again note the complaints of the airline associations about the IT costs of complying with (c). If those costs are large for the airlines, they will be gigantic for travel agencies. Economic impacts of this magnitude would force most agencies with booking engine web sites to terminate them rather than face enforcement action by the Department for failure to disclose or, worse, disclose inaccurately the ancillary fee data for a particular passenger. Creating such incentives disserves consumers by further restricting the access points at which ancillary fee information can be reliably obtained. 7

9 Finally, as noted earlier, representatives of virtually all airlines of consequence to the United States market have requested long extensions of time in which to try to comply with the rules that would have gone into effect on August 23, The granting of substantially what the airlines seek will materially close the gap between the implementation of the rules and the third rulemaking on ancillary fees. This is a further compelling reason for the Department to defer implementation of these costly rules until a comprehensive decision is rendered in the fees rulemaking. II. THE E-TICKET CONFIRMATION RULE WILL IMPOSE MASSIVE AND REDUNDANT INTERIM COSTS ON THE RETAIL DISTRIBUTION SYSTEM Section (c) presents even more formidable problems. As applied to travel agents, the fees for carry-on and first and second checked bags must be either (1) written in text on the e- ticket confirmation, or (2) revealed by hyperlink to an airline website, or (3) revealed by link to a place on the agent s website. Moreover, the fee must be expressed as specific charges that account for the buyer s status and the particular buying elements of the transaction. These include, but are not limited to, the traveler s frequent flyer status, the time of purchase relative to departure, the time of day of the departure, the credit card used to make the purchase and any other condition or status that affects the actual fees to be paid by that passenger in order to be accompanied by her luggage. And this rule applies to at least the 194 carriers who settle transactions through the Airlines Reporting Corporation. This rule suffers from the same defects as the rule in section (b) but there are others. By definition the e-ticket confirmation follows the consummation of the ticket purchase. To understand the problem of compliance with section (c), each of the options provided to a travel agency must be examined. 8

10 First, there is the option to produce an e-ticket confirmation with the required disclosures in text. If the rule means what it appears to say, we do not understand how the calculation of the actual applicable baggage fees is to occur, taking into account all relevant criteria as determined by the policies and practices of the chosen airline. Doing this calculation requires a program to do the calculation and access to a timely and accurate set of airline fee policies that can be read and manipulated by the program. Where would an agent acquire such a program, since none exists now? The agency could pay to create the program itself and integrate it into all of its other systems so that the e-ticket confirmation processor would read the calculation and include it in the confirmation. This program would have to be implemented either by manual processes of collecting and inputting all relevant airline policies or by creating a robot program that would enter each airline s website and find the policies. Such a program would be extremely expensive to create and would be a solution at most for a handful of the largest, wealthiest and most technologically advanced agencies. For the rest, this is no solution at all. Moreover, to assure accuracy in the calculations, they must take place in real time, virtually concurrent with the execution of the reservation order. That in turn means that the agency must have created a programming interface that can reach into the airline s database, manipulate the controlling information and produce the list of fees for insertion into the e-ticket confirmation. There is no way an agency could accomplish this without the cooperation of the airline in fact, every airline with baggage fee policies and there is no indication that the airlines are going to cooperate with agencies in this regard. And this process would easily be defeated by decisions the airline made to change its website design or operation. 9

11 The option to disclose the information by hyperlink to the airline website(s) involved in the itinerary is not a solution. If there is more than one airline, the agency s software would have to be modified so that its confirmations would refer to multiple websites when necessary. But to what does the agency link point? How is the airline s website going to be aware that the agency has booked Passenger Jones on that airline in the agency s GDS? If the website is not aware, it will not be able to do the calculations and create the complying information for the passenger who, upon receipt of the confirmation, may try to link to the airline to confirm the baggage fees. Writing a program at each airline to assure that each carrier s website would be aware of a GDS booking made by any agent on any airline and to do the baggage fee calculation would, we suggest, be an enormously costly undertaking. The new rules do not require the airlines to do this and, given their stated positions of antagonism to sharing ancillary fee information with travel agents, it is most unlikely they would choose to undertake the work or bear those costs. So we come to the third option, which is the travel agency provides on the confirmation a link to its own website where the baggage fee disclosure will reside. The problem with this is the same one faced by the airlines but worse. The agency would have to create programs that would reach out to airline websites to somehow secure the fee policies in all their complexity and conduct the calculation immediately upon the making of the reservation. If the creation of this type of program by 194 airlines is a costly undertaking, it is simply impossible for the 9,977 travel agency firms in business on May 22, If, on the other hand, the rule does not require the calculation of specific charges as it appears to say, but requires only a link to a place where the chosen airline s policies for baggage fees are set out, the rule becomes little more than an e-ticket version of the initial baggage fee disclosure rule in section (b). If that is what (c) really means, the rule is subject to 6 Data from Airlines Reporting Corporation. 10

12 the same infirmities as (b) and should be deferred until a regulatory regime for all ancillary fees can be devised. There is a high likelihood that the work involved in complying with section (c) will have to be modified when the final rule in the supplemental rulemaking is issued. Enforcing the e-ticket rule starting August 23, 2011, means that agencies will inevitably incur incremental costs that could be avoided by doing the compliance work one time when the final rules are adopted in the supplemental rulemaking. We do not believe the GDSs are a potential source of solution to the problems recited above. The GDSs have the same problem as travel agencies in securing the data from the airlines. To the best of our knowledge there is no system in place that will enable the tasks that appear to be required by section (c) in either an airline or GDS environment. E-ticket confirmations are a real-time function so the only commercially viable process is one that delivers the fully vetted fee calculation electronically and immediately upon completion of the booking process. Even if one or more airlines decided to produce this calculation within their internal reservations systems in response to each agency reservation, an extreme improbability, no software exists that can reach into an airline database and extract the completed calculation for insertion into an agency-generated e-confirmation. It is clear, we submit, that the e-ticket confirmation rule cannot be complied with in a commercially viable manner if it is interpreted as written. If, on the other hand, it only refers to airline policies, it remains an impractical solution and in some circumstances requires illegal actions by travel agents seeking to comply. The best course forward is to defer implementation of the rule until its implications can be thoroughly debated during the supplemental rulemaking. By that approach there will be one set of disclosure rules adopted at the same time that will have the benefit of full vetting of commercial, technical and legal feasibility. 11

13 III. CONCLUSION We emphasize in closing that ASTA is not opposed to fee disclosures on agency websites and on e-ticket confirmations. Our concerns are that the rules as written will impose huge and unnecessary costs on the industry, the effect of which must inevitably be to drive still more agencies from the business of issuing airline tickets and to deter others from doing so using Internet technologies because the burden of compliance will exceed any benefit the agencies stand to gain from using those technologies to sell and grow their business and offer the public more options for buying air travel. The superior path forward is to defer implementation of the baggage disclosure and e-ticket confirmation rules until they can be re-crafted in the context of a complete set of disclosure rules that have been fully debated and understood. Respectfully submitted, Paul M. Ruden Senior Vice President Legal & Industry Affairs 12