There is a battle brewing between airlines and their main GDS distribution systems. There are two main facets to this struggle. Airlines don’t want to pay anyone any commissions for any transactions (their intent is to have sales agents pay them for access to fares) and they want to keep fees hidden from consumers and maintain control of prices, doling them as out, as needed by consumers, rather than allowing a robust competition between airlines on total cost.
We as consumers need transparency. Airlines should be required to publish their fees through systems accessible to ticket agents at the same time that they publish their airfares. Airlines find no problem in changing airfares and publishing changes five times a day right now. Once the fee reports are instituted, they will only change when the airlines see fit to change the fees.
In this case fees (unbundled airfares) will be public information and the marketplace will be able to present them consumers to make total cost price comparisons possible.
In a recent meeting with airline organizations, the first example presented was the fee for shipping coffins. Airlines don’t feel there needs to be a coffin fee presented to consumers.
Of course not. But, why aren’t coffin fees presented in the open marked so that families who have to fly remains of their loved ones back to the U.S.A. or vice versa can go online and find the most cost-effective path.
Cory Garner, American Airlines’ director of merchandising strategy, noted
An airline might offer only 20 or 30 optional services, he said, but there are thousands of possible combinations, and “we have no interest in overwhelming the customer” with choices that will not suit their needs. … “The key piece is to have the shopping process closer to the airline,” Garner said.
Garner could not be further from the truth when it comes to competition. Though, he may be totally accurate when it comes to control of pricing information by the airlines.
This is exactly the point of this issue. Airlines must not be allowed to unbundle airfares and then keep a portion of that former “airfare” secret. If they are selling something, the list price should be public information.
How these fees will be presented by website like Travelocity, Expedia, Orbitz and Priceline is no business of the airlines. However, you’d better believe that these online travel agencies will find ways to make the fees understandable and accessible to the traveling public.
Time and again, airlines have been slow to provide open comparisons even within their own websites. They make finding the lowest airfares difficult and confusing.
Keeping these fees secret a hidden as proprietary content works against competition and against marketing innovation. Just as Expedia’s, Priceline’s and Kayak’s displays follow radically different systems, they allow consumers to choose how airfares are presented to them that make their decisions simplest. Some travelers choose Expedia, some Priceline and others start with Kayak. That’s real competition between online travel agents and that provides the system for competition between airlines.
It is time that Congress legislates the release of airline fees at the same time as airfares and stops the charade perpetuated by airlines that some prices and costs are better kept hidden in the consumers’ interest. Such a claim is horse hockey.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
