Business travel trade reps press Congressional committee on hidden airline fees
I hardly ever simply post a press release, but this one from the Business Travel Coalition, founded in 1994 “to bring transparency to industry and government policies and practices so that customers can influence issues of strategic importance to their organizations” seems interesting enough to share it as it was released. My own comments, also in red italics, follow the text of the release.
Industry Survey Results Reveal Significant Concern Over Airline Unbundling Practices
U.S. DOT Rules Required To Protect Consumers, Managed Travel Programs
JULY 13, 2010, WASHINGTON, DC – Business Travel Coalition (BTC) today published results of a survey of 188 travel industry professionals from 11 countries, including corporate travel managers and travel agency executives, regarding airline product unbundling and ancillary fees. These survey results are being released ahead of a July 14 U.S. House Transportation Subcommittee on Aviation hearing regarding airline fees at which BTC is providing testimony.
The overriding message from survey participants is that ancillary fees are wrecking havoc on corporate managed travel programs and the U.S. Department of Transportation must, through it Notice of Proposed Rulemaking, require airlines to make add-on fee data easily accessible not only on their websites, but also to the travel agency channel through any GDS in which an airline has agreed to participate.
The following top-line results represent a sea change in thinking among travel industry professionals regarding government oversight in commercial air transportation:
• 100% of corporate travel managers indicated that unbundling and these extra fees have caused serious problems for their managed travel programs.
• 86% of travel managers believe that airlines, absent government regulation, will not make fair, adequate and readily accessible disclosure of their extra fees and charges so that travel managers and/or their TMCs can do comparison shopping of the all-in prices for air travel across carriers.
• 95% of travel managers support the proposal that the U.S. DOT require airlines to make ancillary fee data available and easily accessible to the travel agency channel through any GDS in which that airline has agreed to participate.
• 95% of travel managers do not support an airline distribution model wherein access to airfare and ancillary services content is available only on airlines’ websites, or through direct connections to multiple airlines’ inventory systems.
“Importantly, survey participants are business people who, as a general proposition, do not favor government intervention in a marketplace. However, as with BTC, who testified four times since 1999 against passenger rights legislation, these industry experts lived through 10 years of airline stonewalling and broken promises and finally realized that the airlines were never going to take extended tarmac delays seriously until made to do so, said BTC Chairman Kevin Mitchell. “Travel managers and travel agency executives do not want to wait 10 years, or even 1 more year to see if the airlines will properly disclose their ancillary fees in all channels in which they sell their products – and thus already make their published, but now incomplete, fares available, he continued.”
Here are sample comments from survey participants:
• “Determining the actual cost of transportation is now so difficult that we cannot help departments prepare travel budgets for the following year.”
• “The comparison of different providers’ options is difficult as there are all-inclusive, partly-inclusive, status-inclusive, non-inclusive prices. At the moment the extra services and fees are not available for total cost calculation in our preferred channel, the GDS.”
• “I can no longer manage costs as the fees are hidden. There is no way to determine if the traveler paid for baggage or upgraded to business class.”
• “Because airlines are not forthcoming with information, we cannot relay the true cost of an itinerary to the traveler.”
• “Many airlines want to hide these charges from buyers so that they can distort the real ticket cost in the GDS and other distribution channels.”
• “Many consumers still use their local travel agency as a resource for making travel arrangements, therefore, it is essential they have that all the information concerning ancillary fees available to them/and the consumer at the point of sale.”
• “All fee data should be made available to travel agents through their GDSs. All airlines should be required to provide full and fair disclosure by law.”
The bottom line is that represents of a business travel organization, which might be expected to be empathetic to the airline business, is very concerned over hidden fees and surprise add-ons. We individual travelers find ourselves paying all sorts of extras on top of our “bargain” fares, but for corporate travel, these surprises add up to a big debit on a company’s balance sheet. (The release should read “wreaking havoc, not “wrecking havoc,” but I’m splitting grammatical hairs over a very valid point made by an international trade group — albeit one that I don’t remember ever having heard about before.) Since Congress tends to listen to business much more than to us voters, I hope that this will make an impact that will help all of us who fly. Note: The end of the release also referenced an organization called the Consumer Travel Alliance’s ”just-released analysis of hidden fees.”
