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Before the

DEPARTMENT OF TRANSPORTATION

Washington, DC 20590

APPLICATION FOR 

APPROVAL OF AN 

AGREEMENT 

(RESOLUTION 787) BY THE 

INTERNATIONAL AIR 

TRANSPORT ASSOCIATION

(Docket No. OST-2013-0048)

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COMMENTS OF 

EDWARD 

HASBROUCK

Edward Hasbrouck

1130 Treat Ave.

San Francisco, CA 94110

telephone 415-824-0214

edward@hasbrouck.org

http://www.hasbrouck.org

1 May 2013

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
Page 2 of 7

1. Introduction

I am a travel expert and consultant, consumer advocate for travellers, author of two books

of consumer advice for travellers on issues including airline ticket pricing and shopping 

technology, author/publisher of a Web site and blog of consumer advice and information for 

travellers, affiliate of an Internet travel agency, and policy analyst for the Consumer Travel 

Alliance (which has also submitted comments in this docket). I have testified on travel issues

before U.S. government agencies and the Canadian and European Parliaments, and have served 

as an expert witness in lawsuits and arbitration related to airline ticket sales and technology.1

(These comments are submitted strictly on my own behalf, and do not necessarily 

represent the opinions or beliefs of the publisher of my books, the travel agency with which I am 

affiliated, or any of my past or present employers or consulting clients.)

I welcome this opportunity to comment on the application of the International Air 

Transport Association (IATA) for approval of IATA's Resolution 787 regarding proposed 

changes to airline pricing, price information disclosure, and ticket sales technology and business 

practices, described as a "New Distribution Capability" (NDC) for airline tickets.

By its application in this docket, IATA seeks to have it both ways.

IATA claims that its Resolution 787 does not yet, in and of itself, require Department of 

Transportation (DOT) approval or any changes to treaties or international agreements to which 

the U.S. is a party, Federal statutes, or Department of Transportation (DOT) regulations. IATA 

claims that Resolution 787 is merely "aspirational", and that, "IATA is not seeking an 

endorsement of the stated business requirements or marketplace aspirations of NDC and 

recognizes that any additional conference agreements on standardization of distribution practices

would need to be filed with DOT before becoming effective."

Yet IATA is formally seeking DOT "approval" of Resolution 787, despite ITA's not yet 

having defined or publicly disclosed what changes to regulations, statutes, or treaties might be 

required for IATA and its members to realize these "aspirations".

The only reason for IATA to seek such (premature) approval of a proposal whose legal 

implications have not yet been fully disclosed, discussed, or reviewed would be in order to be 

able later to claim, when the necessary regulatory, statutory, and treaty amendments are made 

explicit, that Resolution 787 has already been approved, at least in concept, and that the changes 

required to implement it should therefore be subjected to only minimal, if any, DOT review.

DOT should decline to put the cart before the horse, or approve this scheme too hastily. 

DOT should not approve IATA Resolution 787 without explicit disclosure by IATA, opportunity

for public comment on, and consideration by DOT of its legal implications.

1 See my professional biography at <http://hasbrouck.org/bio/>.

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
Page 3 of 7

To the extent that Resolution 787 is, in fact, purely "aspirational", and does not require 

DOT approval, DOT should reject IATA's application as outside DOT's regulatory jurisdiction.

To the extent that implementation of Resolution 787 will require any changes to DOT 

regulations (which it will, as discussed below), DOT should reject the application as premature 

and as failing to provide sufficient specificity to enable adequate review of those changes.

However, since IATA has, by this application for DOT approval, opened the door to 

DOT review of Resolution 787, DOT should take this opportunity to issue guidance to IATA and

its members clarifying and reinforcing DOT's continued commitment, and the continued legal 

obligation of IATA members, to sell airline tickets in accordance with publicly accessible tariffs

applicable equally to all would-be passengers, in a transparent and non-discriminatory manner 

which respects the public right to travel by air and the status of airlines as common carriers.

2. IATA Resolution 787 and "personalized pricing"

The essential "aspiration" implicit in IATA's Resolution 787 is the replacement of 

published tariffs of airline fares (a "fare" consisting of a price associated with a set of rules), 

applicable to all would-be passengers on a non-discriminatory basis, with "personalized pricing".

Nothing in IATA's application for approval of Resolution 787 explicitly discloses an 

intention to abandon reliance on published tariffs as the basis for pricing of airline tickets. The 

word "tariff" never appears in the application, the resolution, or the descriptions of the pricing 

process they contemplate. Instead, the application and the resolution describe standards and 

technologies for airlines to make personalized ticket price "offers" to individual customers.

This would be a fundamental change in, and reduction of, the choices offered by airlines 

to consumers. At present, airlines are free to advertise or promote only a subset of their fares, but

they are required to offer tickets for sale at all fares in their tariff. Publicizing a fare without 

actually making any seats available which would permit a would-be purchaser to avail herself of 

the fare would constitute a deceptive practice prohibited by law and DOT regulations.

IATA's application for approval of Resolution 787 grossly misstates the process currently

used for determining the prices of airline tickets. "For decades," IATA claims, "airline shopping 

has been based on only two factors; schedule and price, using 'low fare search engines' to find 

only a single, often restricted, fare."

In fact, "low-fare search engines" and the display of only a single fare in response to a 

customer inquiry are recent airline innovations which are intended to, and are effective for, 

reducing the numbers of choices displayed to potential ticket purchasers or travel agents.

For decades, travellers and travel agents have had access – first through printed tariff 

books and later through what were called first Computerized Reservation Systems (CRSs) and 

then Global Distribution Systems (GDSs) – to all fares published and thereby offered by airlines,

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
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not merely to a single fare. Travellers and travel agents have been able to browse, sort, and 

search fares by a wide variety of fare attributes including routings, stopovers, minimum and 

maximum stay, seasonality, etc. – not merely by schedule and price.

The change contemplated by IATA Resolution 787 is thus a change in the direction of 

less price transparency and fewer choices for airline ticket purchasers.

As discussed further below, airlines have been and still are required by law to make their 

complete tariffs available to the public, and to provide conspicuous public notice of this at all 

airports and other places where tickets are sold. Airlines are required to offer each consumer the 

option to purchase a ticket at any fare in the tariff with the rules of which the customer is willing 

to comply. Offering a customer only a single fare, which IATA claims has been the norm for 

"decades", is both a recent and an illegal airline practice.

3. The legal basis for airlines' obligation to impersonal pricing

Airlines are required to sell tickets according to publicly-disclosed, impersonal tariffs as a

consequence of the status of air travel as a right guaranteed by international treaties and U.S. 

law, as an aspect of airlines' status as common carriers under international treaties and U.S. law, 

and pursuant to tariff requirements in international treaties, U.S. law, and DOT regulations.

Travel is a right guaranteed by Article 12 of the International Convention on Civil and 

Political Rights (ICCPR), as ratified by and binding on the U.S. as a party: "Everyone lawfully 

within the territory of a State shall, within that territory, have the right to liberty of movement."

With respect to air travel, Article 12 of the ICCPR has been effectuated by 49 USC 

§40101 and 49 USC § 40103, which provide that, "A citizen of the United States has a public 

right of transit through the navigable airspace", and require that, "the Administrator ... shall 

consider... the public right of freedom of transit through the navigable airspace."

As a right, air travel cannot be arbitrarily interfered with, and any restrictions or 

conditions on the right to air travel – including the right to air travel by common carrier – are 

subject to strict scrutiny. To the extent that it would permit airlines to set prices on any basis 

other than on impersonal, nondiscriminatory rules, personalized pricing would fail to respect the 

rights of would-be travellers to equal treatment, and would fail to satisfy such strict scrutiny.

Numerous bilateral and multilateral aviation treaties and international agreements to 

which the U.S. is a party specify that airlines operate as common carriers, and/or explicitly 

require adherence to published tariffs as the sole permissible basis for airline ticket pricing. An 

entity which reserves the right to refuse service, or to charge an arbitrarily high price on an 

individual basis to effectively refuse service, does not satisfy the definition of a common carrier. 

By definition, a common carrier offers to provide service to all customers willing to pay the price

and comply with the rules specified in its published tariff of fares. Common carrier and tariff 

and tariff publication requirements in international aviation treaties preclude the U.S. 

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
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government from approving personalized non-tariff based (or non-public tariff based) airline 

ticket pricing without withdrawing from or amending those treaties.

Adherence to a tariff is categorically and explicitly required by Federal law for all 

international air transportation by common carriers, pursuant to 49 USC § 41510: "An air carrier,

foreign air carrier, or ticket agent may not — (1) charge or receive compensation for foreign air 

transportation that is different from the price specified in the tariff of the carrier that is in effect 

for that transportation." Any personalized price not based on a tariff would be a per se violation 

of 49 USC § 41510. DOT has no discretion to approve any such price or pricing practice. The 

prohibition on off-tariff pricing applies to all prices for international transportation (49 USC § 

41510(a)(1)) and to the price of any other "privilege or facility related to a matter required by the

Secretary of Transportation to be specified in a tariff" (49 USC § 41510(a)(3)).

For both domestic and international passenger transportation by air common carriers, 

DOT regulations at 14 CFR 221, Subpart K, require that all airlines "must make tariff 

information available to the general public" (14 CFR 221.100). Each airline is required either to 

make its complete tariff available for inspection at each place where tickets are sold (14 CFR 

221.101-221.105), or to "display continuously in a conspicuous public place at each airport or 

other ticket sales office of the carrier a notice printed in large type reading as follows:... [A] file 

of all tariffs of this company, with indexes thereof, ... is maintained and kept available for public 

inspection at. (Here indicate the place or places where tariff files are maintained, including the 

street address and, where appropriate, the room number.)" (14 CFR 221.107).

4. The public policy basis for requiring adherence to published tariffs

The switch from impersonal tariffs to personalized pricing of airline tickets would require

changes to treaties, statutes, and regulations which IATA has neither acknowledged nor justified,

and most of which are beyond the scope of DOT's administrative authority to approve by 

regulation. But since IATA has chosen to raise these issues through this application, it's 

important to note for the record that there are sound public policy reasons why, as discussed 

above, personalized pricing is illegal, and why it should remain so. 

Laws regulating places of public accommodation for travellers such as inns and hotels, 

including requirements for them to post and adhere to posted tariffs, are among the oldest laws 

designed to protect consumers against predatory pricing and exploitation by providers of 

essential travel services who typically have a local monopoly or oligopoly. These principles later

found expression in legal requirements for common carriers including railroads and later airlines.

Even in international markets where airfares have been deregulated and airlines are 

allowed to set their own prices without the need for government approval, Congress has properly

continued to require airlines to sell tickets only in accordance with publicly-disclosed tariffs.

Under the present pricing rules, travellers are entitled to insist that an airline justify any 

fee or demand for payment by reference to some specific provision of an applicable 

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
Page 6 of 7

publicly-accessible tariff. Without the requirement for adherence to a tariff, travellers would be 

subject, even after committing themselves to a journey or in the middle of their trip, to arbitrary, 

extortionate, or perhaps discriminatory "personalized" demands for additional payments.

Maintaining the current tariff and tariff publication requirements is an essential check on 

exploitative, discriminatory, and/or collusive airline behavior. Without the full price 

transparency which only adherence to a public tariff can provide, it's impossible for members of 

the public, consumer advocates, independent watchdogs, or the government itself to exercise 

effective oversight over these violations of travellers' economic and civil rights. Without the 

ability to compare charges to a tariff, it would be almost impossible to determine whether price 

discrimination (the goal of personalized pricing) was based on invidious and prohibited factors.

5. The privacy of personal information obtained by airlines and their agents

Even were it not otherwise prohibited, as discussed above, personalized pricing as 

contemplated by IATA Resolution 787 would greatly increase the risk of invasion of travellers' 

privacy and misuse of personal information related to travellers obtained by airlines, their agents,

and/or their contractors and service providers including providers of personalization data.

These risks would pertain both to information provided by travellers themselves, and to 

information about them acquired from commercial data brokers for purposes of price 

personalization, price optimization, and price discrimination.

IATA claims disingenuously that anonymous price quotes would still be permitted under 

its contemplated "New Distribution Capability" (NDC). But IATA makes no commitment with 

respect to the price premium that IATA member airlines might charge for anonymity.

Disclosure of personal information as a condition of obtaining a lower price under such a 

system, where the price for withholding personal information could be prohibitively high, would 

not in any meaningful sense remain "voluntary". Such a proposal should properly be evaluated 

as a proposal to allow airlines to condition the exercise of the public right of transit by air on a 

coerced disclosure of personal information to airlines, and a coerced grant of "permission" to 

airlines to monetize that information for themselves or third parties.

This prospect is particularly problematic because there are not currently any 

sector-specific privacy rules applicable to personal data obtained by airlines, and because 

personal information obtained, held, and/or used by travel companies often falls through gaps in 

enforcement due to a lack of interdepartmental jurisdictional coordination between the 

Department of Transportation (which has jurisdiction over airlines and their agents, including 

over their compliance with the U.S.-E.U. Safe Harbor Framework), the Federal Communications

Commission (which has partial jurisdiction over CRSs/GDSs when they act as electronic 

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013
Page 7 of 7

communication service providers), and the Federal Trade Commission (which has jurisdiction 

over most other travel companies including airline IT vendors and data brokers).

2

Before considering regulatory, statutory, or treaty changes such as would be required for 

approval of any "personalized pricing" scheme, DOT should conduct an interdepartmental 

review and issue issue guidance, in coordination with the FTC and other agencies, clarifying the 

boundaries of each agency's jurisdiction, the applicable laws and regulations, and the available 

complaint and enforcement mechanisms, for the various industry sectors involved in the 

collection, storage, and use of personal information related to air travel and travellers.

Based on that review, DOT and the other agencies with jurisdiction over the protection of

personal information related to travellers should consider what new legislation may be needed to 

close jurisdictional gaps and/or extend adequate personal data protection to air travellers.

Only after such a review of the privacy polices and the legal framework for enforcement 

of privacy protection for travel data would it be appropriate to consider a proposal with such 

sweeping implications for air travellers' privacy as IATA's Resolution 787.

Respectfully submitted,

 /s/ 

Edward Hasbrouck

1130 Treat Ave.

San Francisco, CA 94110

telephone 415-824-0214

edward@hasbrouck.org

http://www.hasbrouck.org

2 See Edward Hasbrouck, the Consumer Travel Alliance, Consumer Federation of America, and Center for 

Financial Privacy and Human Rights, "Comments to the Federal Trade Commission Privacy Roundtables – 

Project No. P095416" (November 6, 2009), available at 

<www.ftc.gov/os/comments/privacyroundtable/544506-00025.pdf> and 

<http://hasbrouck.org/articles/Hasbrouck_et_al-FTC-6NOV2009.pdf>.

Edward Hasbrouck

<http://www.hasbrouck.org>

Comments, Docket No. OST-2013-0048

1 May 2013