BTC: US Airways-AA merger would bolster ‘anti-competitive’ IATA project
Calls New Distribution Capability ‘toxic,’ ‘shocking’
The chairman of the Business Travel Coalition widened his opposition to the American-US Airways merger to include a broad attack on IATA’s New Distribution Capability, calling it “brazen,” “shocking” and “toxic.”
Kevin Mitchell planned to testify on Feb. 27 before the U.S. House subcommittee on regulatory reform, commercial and antitrust law that the proposed merger eliminates US Airways, “a maverick on airline distribution issues,” making it “far easier to coordinate, expressly or tacitly, among three network competitors and far easier to impose this anti-consumer, anti-competitive model, especially given the enormous clout that the new American would have as the biggest carrier on the planet.”
He added that “once NDC is established here in the world’s largest aviation market, it’s lights out, game over for consumers.”
IATA says its NDC project aims to enable airlines to create personalized offers for travel shoppers based on demographic information, loyalty status, history with the airline and other factors.
The project itself does not build any technology or establish commercial terms.
Rather, it is developing XML schemas so that any airline adopting such a distribution strategy would have technical standards to follow.
IATA is seeking to avoid the one-of-a-kind development that stunted the growth of the electronic ticket when several airlines developed unique versions that did not become interoperable for a decade.
But Mitchell says NDC is a new business model designed to “terminate by agreement among airline competitors the current market-driven and transparent model for the pricing and sale of tickets.”
Some of Mitchell’s testimony directly contradicts the “frequently asked questions” section about NDC on IATA’s website.
For example, he states that “this new business model is an agreement that is binding on all of the roughly 240 IATA-member airlines worldwide” that wish to sell “enhanced content” or ancillary services.
IATA’s FAQ states:
“Does the NDC standard make the implementation of NDC mandatory?”
“A: No. Each individual carrier decides whether to implement NDC.”
Mitchell says Resolution 787, by which IATA members approved the NDC project, “codifies that airlines have agreed they have the right to demand from consumers, before they would be privileged to receive a fare quote, personal information including name, age, nationality, contact details, frequent flyer numbers, purpose of trip (business or leisure), prior shopping, purchase and travel history and marital status.”
IATA’s FAQ states:
“Will travelers have to provide personal information in order to purchase tickets through the NDC?”
“A: No. Travelers will have a choice. Personal details provided by the traveler in the shopping process will enable the airline to personalize the product offered and to make the offer more relevant. Providing these details is not mandatory for the traveler.”
Read about Sabre’s new defense in US Airways’ antitrust lawsuit in the Jan. 7 issue of TTU.
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