Iata plots 'end to airfare comparison shopping'

Airline association Iata will take a major step toward overturning the existing fare-distribution system if a vote among a group of about 30 airline representatives goes the way it wants.

The Iata distribution working group, meeting at the association’s World Passenger Symposium in Abu Dhabi voted yesterday on a motion to establish a New Distribution Capability. The result should be announced today.

A yes vote, required to be unanimous, would see Iata set up a pilot Dynamic Airline Shopping (DAS) API next year.

This would sit as an interface between participating airlines and existing fare distributers - primarily the Global Distribution Systems (GDSs) which service travel agents and travel management companies.

Participating airlines are expected to include British Airways, Lufthansa, Air France-KLM and leading US carriers.

The system will reverse the existing model which sees carriers file fares with GDSs for agents and consumers to access. Instead agents, GDSs and customers will submit travel requests, providing personal data and details of what they require, allowing airlines to respond with a customised offer.

Christoph Klenner, secretary general of the European Technology and Travel Services Association (Ettsa), said: “This has the potential to revolutionise the way travel is distributed and booked. There are concerns it will give airlines a tool to price differently to different consumers.”

The move appears certain to arouse the interest of regulators.

Klenner said: “Regulators would have to take a long look at it.” But at the moment, he added: “The European Commission has no idea this is coming.”

Ettsa represents the GDSs and major online travel agents (OTAs) such as Expedia, lastminute and ebookers. Klenner said: “The airlines are presenting this as a consumer friendly measure. They say it will ensure they can make all their content, including ancillaries, available to all distribution channels.

“But this is being driven by a small number of large airlines, with dominant hubs, which are dominant in their own markets and don’t need comparison shopping.”

Carriers have persistently criticised GDSs, accusing them of being slow to develop technology to allow carriers to sell on more than price alone. Iata director general Tony Tyler argued in June that “the GDS model is holding us back”.

However, Klenner insisted: “This is a not a technology problem. The GDSs understand the airlines want innovation to lower their costs and increase revenue. We are not against the new distribution capability.

“GDSs are at an advanced stage in being able to offer what airlines want. But the GDSs aggregate content that gives transparency to the end consumer.

"This is a tool to ensure people cannot comparison shop effectively. Airlines will charge higher fares to those they believe will be ready to pay more.”

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