US transport department gives Iata go-ahead for NDC with safeguards

By Travolution
By Travolution
May 22, 2014 07:39 AM GMT

The US Department of Transportation has provisionally approved airline association IATA’s proposals for a New Distribution Capability (NDC).

The DoT announced its “tentative” decision yesterday as it also issued new consumer-protection rules for airlines and travel agents in the US.

These are subject to consultation but include a provision to broaden the definition of a ‘ticket agent’ to include Google.

The DoT approved IATA’s Resolution 787 establishing NDC as a multi-channel distribution standard which would allow complex retailing by airlines, including the capability to make personalised price offers to consumers.

But it did so with conditions, including guarantees that the adoption of NDC will be voluntary and that carriers must continue to allow anonymous shopping by consumers.

The DoT noted 34 airlines and five airline associations submitted pleas in support of IATA’s application, while “several GDSs”, travel trade associations and travel agencies opposed it.

The latter raised concerns about privacy, argued NDC would lead to anti-competitive practices and said it would discriminate against third-party distribution.

The airlines argued NDC would improve comparison shopping without compromising consumer privacy.

The DoT ruled NDC would be “in the public interest, provided certain safeguards are imposed”.

It noted: “Comparison shopping under the current system is generally limited to comparing fares . . . [and] would be improved by consumer access to . . . information on baggage allowances and fees, extra leg room, Wi-Fi, in-flight entertainment, advance seat selection, boarding privileges and other ancillary services.”

The DoT concluded the development of NDC “would make it easier for consumers to compare competing carriers’ fares and ancillary products across multiple distribution channels”.

However, it insisted: “Consumers’ ability to shop anonymously must not be undermined . . . Our tentative approval . . . should not be construed as approval for individual airlines to require disclosure of personal data.

“An airline may request data . . . but such information cannot be mandatory in order to receive an airfare or ancillary product offer.”

The Business Travel Coalition (BTC), the US corporate travel lobbying group, welcomed the decision. However, it said the DoT “must require that ancillary fee information is disseminated to travel agents in an efficient manner that is truly usable by agents”.

The BTC urged the DoT “to ensure consumers can purchase [ancillary] services from travel agents at the same time as an airline ticket”.

The new consumer-protection rules the DoT proposes would require airlines to disclose bag fees, boarding charges and other fees upfront, including via GDSs.

Major travel agencies – including online travel agents (OTAs) – would also be required to adopt minimum service standards.

The DoT said the proposals would “ensure consumers have clear and accurate information when choosing among air transport options”.

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