In an effort led by the Business Travel Coalition (BTC), over 200 corporate travel departments, travel management companies and travel agency groups have jointly urged the airline industry to come up with standards for unbundled airline fees.

Airline Fees

The coalition sent a letter on April 13, 2010 to major airlines including United, American, US Airways, Southwest, JetBlue, Alaska, Delta and Continental.

In it, BTC, ASTA and signatories from 10 countries express support for the airline industry’s efforts to maximize revenue growth from ancillary products and services, with a gentle nudge that the full scope of these products be made accessible and transparent to all travelers.

The letter adds that “The current lack of clarity and accessibility of a la carte products prohibits widespread consumer adoption… We are requesting that you help us help you by working cooperatively, diligently and in good faith with TMCs, OTAs, GDSs, and corporate travel managers on the rapid development of industry technical standards to ensure that your unbundled products are easily accessible by all travelers via any GDS in which you participate.”

The individual statements made by executives highlight the wide range of complications that the unmanaged growth of airline fees have created.

Michelle de Costa, global travel manager for Sapient, explained the difficulties TMCs face in having to monitor, track and report on the final cost of airfares – “The verified workflow processes of travel companies and online booking tools that feed into our corporate systems rely almost exclusively upon the airline booking and servicing capabilities of global distribution systems. We are looking for airline partners that acknowledge and respect our needs.”

BlackRock vice president and global travel manager Maria McSorley – “I spend more time looking at fees than actually managing travel. Every time we reinvent ourselves as an industry, we cause more chaos than solve problems.”

Delta Air Lines senior vice president of distribution Jim Cron commented on negotiating for ancillary discounts as part of corporate agreements – “It would be disingenuous for the airlines to sit back and say, I want to put that revenue to the side and not count that as money that you spent on the airline.”

The standards and principles for airline product unbundling have been outlined by BTC here, starting with the premise that all airfares, along with unbundled products and their associated costs, as well as any new types of bundled offerings with included components, should be made available through industry distribution providers.

As a practical matter, everyone involved – including the IATA, the GDS with Amadeus as the cheerleader, and many major airlines – are converging on Electronic Miscellaneous Document (EMD) as the solution, which is set to be unveiled by Airlines Reporting Corporation (ARC) in September.

EMD would enable the sale and tracking of ancillary services by both airlines and agents, using e-tickets for every ancillary purchase associated with each ticket. Using EMD, services can be offered and tracked across an entire trip, even if it involves multiple airlines.

This ability to list, collect and track ancillary fees, when combined with legislative amendments from Congress aimed at full disclosure of airline fees beforehand, corners the airline industry into bringing the fees into the system alongside the ticket price, and taking it into consideration while negotiating corporate contracts.

It will also put a stop to disingenuous schemes like the ‘Penny Plus’ fares offered by Spirit Airlines, and allow for side-by-side comparisons of the final prices from different airlines, inclusive of all ancillary fees.

Photo – Bill Shrink

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