Airline Fee Disclosure
Passengers use Air France-KLM e-ticket machines at Orly Airport, near Paris,.
Passengers use Air France-KLM e-ticket machines at Orly Airport, near Paris,. Photographer: Antoine Antoniol/Bloomberg
U.S. airlines are trying to prevent
the federal government from forcing them to provide data to
travel agents about the extra fees being charged to check a bag
or pick an aisle seat.
Consumers need those details so they can see all costs of
booking a trip, according to companies such as Sabre Holdings
Corp. (TSG), which provide fare information to travel agents and
websites. AMR Corp. (AAMRQ)’s American Airlines (AMR) and its allies say the
U.S. Transportation Department should stay out of the dispute.
The fight is reaching Transportation Secretary Ray LaHood’s
desk after raging on Capitol Hill and in courtrooms and private
negotiations. Airlines want to supply data directly to travel
agents and customers, tailoring their offerings to individual
buyers. Distributors’ systems are based on masses of people
being able to quickly compare prices across multiple carriers.
“It’s a very complex debate that has been building over
the past three or four years, particularly as ancillary services
and fees have become increasingly important to an airline’s
bottom line,” said Douglas Quinby, senior director at travel
researcher PhoCusWright in Sherman, Connecticut.
Airline fees generated $8.69 billion in the 12 months that
ended Sept. 30, 10 percent more than a year earlier, according
to the U.S. Bureau of Transportation Statistics. The total
includes bag and rebooking charges and excludes payments for
seat assignments, pillows, blankets and food, according to BTS.
Single Price Displayed
The charges aren’t included in data AMR provides to
distributors such as Sabre and Travelport LLC, which sell the
information to traditional travel agents and online outlets such
as Expedia Inc. (EXPE) Agents are unable to make quick fee calculations
in the single price they display for consumers.
“We do not support government regulation that requires us
to give content, of any sort, to the global distribution
systems,” AMR’s American said in a statement.
Sabre, a former AMR unit, wants the Transportation
Department to require carriers to provide “core” fees for
seats, bags and priority boarding, Chief Executive Officer Sam Gilliland said in an interview.
The rule may go forward in light of LaHood’s willingness to
regulate an airline industry “the consumer isn’t real happy
about,” said George Hamlin, president of Hamlin Transportation
Consulting in Fairfax, Virginia. “We have sort of creeping
LaHood imposed a 2010 rule that fines carriers for failing
to let customers off planes stuck on the tarmac for three hours.
A second round of rules raised payments for involuntarily bumped
passengers, applied tarmac fines to overseas flights and
required fare advertisements to include government taxes.
Fee-disclosure requirements are under consideration for the
agency’s third round of rulemaking, General Counsel Robert Rivkin said. The proposed rules are due in August.
“Our general principles are that we want consumers to be
able to easily determine the full price of their air
transportation before they travel,” Rivkin said.
Expedia, the biggest online travel agency by gross
bookings, wants the information published alongside fares by the
Airline Tariff Publishing Co., or ATPCO, which provides fare
data for more than 450 carriers worldwide, said Glenn Wallace,
Expedia’s vice president of transport strategy. It doesn’t want
the government involved, Wallace said.
‘Need a Spreadsheet’
Fees are so numerous “you need a spreadsheet” to keep
track, said Kevin Mitchell, chairman of Radnor, Pennsylvania-
based Business Travel Coalition, a trade group for corporate
travel managers. Consumers are frustrated not knowing charges,
and businesses can’t track costs, he said.
Airlines have urged the Transportation Department in
meetings not to force sharing of fee data, and American and US
Airways Group Inc. (LCC) brought antitrust lawsuits against
distributors in 2011. Southlake, Texas-based Sabre and
Travelport denied the charges and some claims later were
dismissed. Trials are pending.
“This is essentially a contractual relationship carriers
have” with distributors, said Sharon Pinkerton, senior vice
president of policy at the Airlines for America trade group,
whose members include Fort Worth, Texas-based American, Delta
Air Lines Inc. (DAL) and United Continental Holdings Inc. (UAL)
That argument helped persuade senators to keep a fee-data
provision out of Federal Aviation Administration legislation
earlier this year, she said.
US Airways is “happy” to have distributors and online
agents sell its products, President Scott Kirby said. “The
problem is, they don’t want to sell it. They want to keep their
antiquated system because it works well for them. We’d love to
change it and have them help us change it.”
United Continental declined to comment and Delta referred
calls to Washington-based Airlines for America. They are the
largest full-service U.S. airlines, followed by American and
Tempe, Arizona-based US Airways.
Travel agents would prefer using distributors to get fee
data rather than creating separate technology channels with each
carrier, said Henry Harteveldt, chief research officer at
Atmosphere Research Group LLC in San Francisco.
“The DOT is going to tell the airlines, you may want to be
able to withhold these, but they are so critical that someone in
the travel agency channel has to have access,” Harteveldt said.
American last year reached an agreement to provide flight
and fare data directly to Priceline.com. Even with such
arrangements, 58 percent of tickets sold last year were through
agents using distributors, according to PhoCusWright.
Former AMR CEO Robert Crandall said that while he opposes
government intervention, airlines should provide fees to
distributors and “avoid unnecessarily irritating customers.”
Jay Sorensen, a former Midwest Airlines marketing director,
suggested that airlines and data distributors may be able to
thrash out their differences as the technology to reach
consumers evolves and carriers seek new ways to stay profitable.
“It is an industry and a marketplace in transition and
that makes for a messy situation,” said Sorensen, who is now
president of consultant Ideaworks in Shorewood, Wisconsin.
Government should “step out of the way for a while and let this
To contact the reporters on this story:
John Hughes in Washington at
Mary Schlangenstein in Dallas at
To contact the editors responsible for this story:
Ed Dufner at
Bernard Kohn at