Association of Canadian Travel Agencies (ACTA)

2560 Matheson Blvd. E., Ste. 328, Mississauga, ON L4W 4Y9

Tel: 905.282.9294; 888. 257.2282 Fax: 905.282.9826 Email: actacan@acta.ca URL: www.acta.ca July 18, 2013

United States Department of Transportation

1200 New Jersey Avenue, SE

Washington DC

United States of America

Re:Application by the International Air Transport Association (“IATA”)

For Approval of Resolution 787

– Docket OST

‐ 2013

‐ 0048

Dear Sir or Madam

The Association of Canadian Travel Agencies (ACTA) 1 hereby files to endorse and add its

support to the submission in this docket by the American Antitrust Institute (AAI) of July

12, 2013 and that of Open Allies for Airfare Transparency (Open Allies) of July 15, 2013.

Specifically ACTA joins AAI and Open Allies in urging DOT to reject the current Application

by IATA. ACTA further agrees with Open Allies that this rejection can be without

prejudice to IATA’s resubmitting for consideration and comment an amended resolution

or recommended practice that would contain only those terms for which IATA seeks

DOT’s approval.

.

ACTA has harboured deep concerns from the outset about the agreement the IATA

member airlines reached at the Passenger Services Conference on October 18

‐ 19, 2012

for the “Enhanced Distribution ”of the products and services of all IATA airlines. In

particular, from the face of the Resolution the DOT has been asked by IATA to approve, it

is evident that the airlines spearheading this project have used IATA as the vehicle to

reach an agreement establishing a new airline industry

‐ wide business model (called NDC)

for the pricing and selling of air transportation services. This proposed new business

model, which is embedded in and constitutes nearly all of Resolution 787, would

negatively and significantly impact travel industry costs and airline competition and

would drive up airline prices for consumers.

As is plain from the text of Resolution 787 (and as further confirmed by the IATA

‐ prepared documents submitted by Open Allies with its Answer of May 1, 2013), carriers

adopting NDC would no longer publicly file air fares and schedules that would be available

on a non

‐ discriminatory basis for any and all consumers to comparison shop and

purchase through intermediaries such as brick

‐ and

‐ mortar and online travel agencies.

Instead, NDC airlines would create “unique” offers each time a particular consumer

1 ACTA is a national not-for-profit trade association wi th Canadian members from all verticals in the travel

and tourism industry. ACTA represents almost 2000 retail travel services providers across Canada.Association of Canadian Travel Agencies (ACTA)

2560 Matheson Blvd. E., Ste. 328, Mississauga, ON L4W 4Y9

Tel: 905.282.9294; 888. 257.2282 Fax: 905.282.9826 Email: actacan@acta.ca URL: www.acta.ca requested a fare for a specific route and date. The offers made by each airline would be

“customized” based on personal details the airlines have agreed in Resolution 787 they

have the right to insist upon from consumers and their travel agents as a precondition for

quoting any prices.

The personal information about each specific traveller the airlines have agreed among

themselves they will have the right to demand is quite detailed and concerning. The

Resolution (Section 3.1.1) on its face states that the information required for

“authentication” of the consumer will include (but is expressly said not to be limited to):

name, age, marital status, contact details [such as email address], frequent flyer numbers,

nationality, shopping, purchase and history, and whether the purpose of the trip is for

business or leisure. Many of these items of sensitive personal information can be used

very effectively by airlines to pinpoint, and extract higher prices from, those travellers

who are likely to be less price sensitive

‐‐ such as the business travellers whose needs

many ACTA members serve.

As AAI and Open Allies explained in their respective filings of July 12, 2013 and July 15,

2013, IATA’s procedural manoeuvres have created vast and unacceptable ambiguity and

uncertainty about the exact nature of the agreement for which IATA seeks DOT approval.

First, IATA filed the entire Resolution 787 but then claimed in its Application that it was

seeking approval “only insofar as it describes a means to modernize distribution

communications technology with a new XML standard.” (IATA Application at p. 2.) IATA

generated dangerous ambiguity from the very beginning of this proceeding because it did

not identify the specific portions of this 10

‐ page inter

‐ carrier agreement that it believed

addressed only that technical matter. A close reading of Resolution 787 provides no

clarity whatsoever about the specific provisions of the larger agreement to which IATA

might be referring. In fact, nearly all of the Resolution instead is devoted to setting out

the details of the NDC business model which ACTA and hundreds of other commenter’s

believe is highly problematic from competition and privacy law perspectives.

Further, as both AAI and Open Allies have explained, IATA’s characterizations in its

Application of what Resolution 787 means are frequently in direct conflict with the plain

language of the Resolution itself. The June 3, 2013 Resolution of the IATA Annual General

Meeting, expressing general statements of intent about how Resolution 787 was to

operate in practice

‐ statements which again find no support in the actual text of

Resolution 787

‐ only added further complexity and confusion to the issues DOT is being

asked to address. Finally, ACTA fully concurs with AAI and Open Allies that the conditions

offered by IATA in its Reply of June 21, 2013 are unsatisfactory in substance and again at

odds with, or have no basis in, the express terms of Resolution 787. The IATA conditions

thus do not remediate the problems with the Resolution but instead further confound the

already vexing, key question in this docket: What are the precise terms of, and what

would be the effects of, the agreement that DOT is being asked by IATA to approve?Association of Canadian Travel Agencies (ACTA)

2560 Matheson Blvd. E., Ste. 328, Mississauga, ON L4W 4Y9

Tel: 905.282.9294; 888. 257.2282 Fax: 905.282.9826 Email: actacan@acta.ca URL: www.acta.ca In sum, we agree with AAI that IATA’s actions have produced an unacceptable “moving

target” for DOT and the other stakeholders and with Open Allies that the welter of

contradictory and shifting statements by IATA about the terms and meaning of Resolution

787 have resulted in a “jumbled heap.”

As IATA acknowledged in its Application, the 240 member airlines of IATA account for

84% of all scheduled passenger traffic worldwide. Therefore, any misstep in lending

government approval to a nebulous agreement concerning distribution methods among

horizontal airline competitors with such global power can be expected to have severe,

negative repercussions for consumers and all other participants across the travel industry.

Given the gravity of the decision IATA has asked DOT to make, it is incumbent on IATA to

correct the confusion its procedural activities has engendered. To do so, and as Open

Allies has urged, IATA should withdraw the current agreement, amend it to include only

those terms for which IATA actually seeks DOT’s go

‐ ahead, and then re

‐ file that amended

resolution (or recommended practice). Only then will the dangerous and unacceptable

ambiguity that IATA has created about the exact nature and effects of the worldwide

airline agreement for which IATA says it seeks DOT’s “imprimatur” be cured. Should IATA

refuse to take this common sense step, then DOT should simply reject IATA’s present

Application.

Yours truly,

David McCaig

President and COO

Association of Canadian Travel Agencies | ACTA

905 282 9294 ext 22