The Obama administration last week pushed forward several new regulations designed to enhance transparency and spur competition in the airline industry.
But it was the DOT's preliminary step toward a rule that would require airlines to share all content, including ancillary products, with OTAs and GDSs that was expected to draw the most attention from the travel agent community as well as the most opposition from air carriers.
"I think airlines will strongly resist it," industry analyst Bob Mann of R.W. Mann & Co. predicted. "It's the equivalent of a taking of intellectual property. If you're an airline, why can't you choose your distribution strategy?"
On Oct. 19, the DOT issued a request for information from consumer groups, airlines and other industry stakeholders in order to determine whether it should clamp down on the airline practice of only selling a portion of their ancillary products through indirect channels, such as OTAs and GDSs, while displaying the full offerings on their own websites.
Some airlines also choose not to sell their tickets at all on certain OTAs.
"[The] DOT will be looking into whether that kind of restriction is an unfair practice that makes it harder for travelers to find the most affordable and convenient flights that match their needs," the department said.
That move, along with other steps taken by the DOT last week, drew a rebuke from the trade group Airlines for America (A4A), which said that "re-regulating" the airline industry could lead to higher ticket prices. The average domestic airfare fell an inflation-adjusted 40% between 1979, when the U.S. government deregulated the industry, and 2015, A4A said.
"Airlines have different business models and must be allowed to continue offering optional services in a manner that makes sense for both their customers and their business," A4A CEO Nick Calio said in a prepared statement. "Efforts designed to re-regulate how airlines distribute their products and services are bad for airline customers, employees, the communities we serve and our overall U.S. economy."
Delta, which is no longer an A4A member, also released a statement opposing mandatory displays of full content. The carrier noted that it has agreements with OTAs that account for nearly 95% of that channel's bookings.
"However, the relationship between airlines and online travel agencies and metasearch sites must be based on mutual respect of the brands and products being offered for sale," Delta said, adding that some sites have employed fraudulent or deceptive business practices.
While airlines are lining up against full content, the travel agent and OTA communities signaled strong support for such a measure last week.
"In an environment wher four carriers control over 80% of domestic air capacity, it is critical that the DOT promote policies that foster transparency of information and competition on price and service offerings," said Steve Shur, president of Travel Tech, a trade group representing OTAs, travel search sites and GDSs. "Ensuring that flight information is readily available in comparative search and shopping environments would be a welcome first step in protecting consumers."
ASTA said that under the current "unregulated" environment, airlines sold $18.6 billion worth of ancillary products in 2015.
"We believe in the free market and in the airlines' prerogative to price their services," ASTA president Zane Kerby said. "However, withholding important information from consumers who engage the services of a professional travel agent harms the traveling public."
On another matter, however, Kerby was critical of last week's DOT actions. He said that the department has been studying the issue of whether airlines should be required to disclose the price of basic ancillary services at the point of sale for five years and called the newly announced rulemaking process on the matter a further delay.
"We have long urged the department to strike a decisive blow for consumers by requiring full transparency and transactability for airline ancillary fees," Kerby said.
