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DOT’s proposal to regulate disclosure of fee information for what it terms “basic ancillary services” misapprehends the context and nature of the issue. This is not a narrow or simple consumer “transparency” issue, but a larger distribution market issue that, notwithstanding DOT’s failure to curb the abuse of market power by GDSs, is resolving itself. Unfortunately, DOT’s proposed rule will have several negative and long-lasting repercussions if either option is adopted.
DOT’s Notice of Proposed Rulemaking on Transparency of Airline Ancillary Fees and Other Consumer Protection Issues (NPRM) solicits comments on a number of important issues related to the distribution of air travel and accompanying services. While the NPRM covers a wide range of issues impacting many sectors of the travel industry, this article focuses on key provisions related to the transparency and transactability of ancillary service fees, which are the GDS community’s primary concern in the DOT’s rulemaking proceeding.
Today, passengers may have to pay ancillary service fees to speak with a reservations agent by phone, check in at the airport, use a pillow or blanket, access Internet service, board the aircraft early, use a credit card, or travel as an unaccompanied minor. When exemptions from these ancillary service fees are added into the mix and the pricing varied based on such factors as the consumer’s status in frequent flyer programs, use of credit cards, and inclusion in group reservations, the complexities of air travel comparison shopping become enormous.
This article addresses three issues that most directly affect travel agencies: (1) how DOT would define a “ticket agent,” (2) whether certain intermediaries designated as “large ticket agencies” should be targeted for additional regulation, and (3) the disclosure and transactability of fees for ancillary services.
This article focuses primarily on DOT’s proposals to (1) broaden the range of information about ancillary fees that carriers must provide to consumers and (2) require that consumers be able to obtain this information not only through the carriers, but also through third-party channels. The article also addresses DOT’s proposed new definition of “ticket agent,” which would drastically expand DOT’s regulatory reach, and DOT’s proposal to create new travel agency service standards, which also may impose significant burdens on airlines.
This issue of the Air and Space Lawyer—devoted entirely to a discussion of key points in the Department of Transportation’s pending Notice of Proposed Rulemaking (NPRM) on Passenger Protections—is an excellent example of what the Forum on Air and Space Law provides to its members.