BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_____________________________________ ) ENHANCING AIRLINE PASSENGER ) PROTECTIONS ) Docket No. OST-2010-0140 _____________________________________)



### PETITION OF THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. TO DEFER IMPLEMENTATION AND FOR CLARIFICATION OF RULES

Communications with respect to this document should be addressed to:

Paul M. Ruden, Esquire Senior Vice President Legal & Industry Affairs American Society of Travel Agents, Inc. 1101 King Street Alexandria, Virginia 22314 Tel. (703) 739-6854 Fax (703) 684-9185 pruden@asta.org

July 6, 20111 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_____________________________________ ) ENHANCING AIRLINE PASSENGER ) PROTECTIONS ) Docket No. OST-2010-0140 _____________________________________)



### PETITION OF THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. TO DEFER IMPLEMENTATION AND FOR CLARIFICATION OF RULES

The American Society of Travel Agents, Inc. (ASTA) 1 respectfully petitions the Department to defer the implementation of two rules adopted in the referenced proceeding and scheduled to become effective August 23, 2011, 76 F ed. Reg. 23110, April 25, 2011, until the Department concludes the supplemental rulemaking on disclosure and access to ancillary fees described at 76 Fed. Reg. 23150. The rules, describ ed further below, are the baggage fee disclosure rule of section 399.85(b) and the e-tick et confirmation rule of section 399.85(c). We also request clarification of the meaning and appli cation of section 399.85(c). We are aware of the requests for extension of imple mentation dates filed by various

domestic and international airline associations. O ur request differs from those in that we believe

1 ASTA is the world’s largest association of professi onal travel agencies. Its membership includes trav el agency companies of the traditional, on-line and hy brid varieties, as well as individual travel agents and many others engaged in aspects of retail and wholesale distribu tion of transportation services.2

the issues presented by the cited rules are not res olvable merely by taking more time to accomplish the technical tasks of implementation. While ASTA applauds and supports the direction the Department has taken regarding more r obust consumer protection rules, and for that reason files this petition reluctantly, the desire for speedy action regarding airline practices related to baggage fees should not override the goa ls of providing an efficient, non-repetitive process for implementing all of the rules related t o ancillary fees and avoiding commercial harm to retail firms that support such robust consumer p rotection rules. Travel agencies will experience most of the same pr oblems detailed by the airlines in their petitions. Travel agencies, like airlines, sh ould not be required to adopt practices that are “error prone, confuse passengers, and destroy ... eff iciencies....” 2 And we cannot fail to note the irony of airlines arguing that “providing different baggage notice fee standards for different methods of purchase creates an uneven approach that will confuse passengers and treat regulated entities differently” while strenuously resisting a ny regime that would require them to provide ancillary fee information to travel agencies in a u seable automated format. ASTA reaffirms its strong support for the direction the Department is taking in forcing airlines to provide stronger protection for consume rs who, for the most part, have no realistic alternatives to using air transportation. ASTA will continue to work constructively with the Department to fashion a regulatory regime that help s consumers, including those among the majority of travelers that want to use the skilled services of intermediaries to buy air transportation. To reach the environment that consu mers want and need in a way that makes commercial sense for those firms that provide air t ransportation service and sales requires, as a

2 REQUEST TO CLARIFY THE FINAL RULE AND TO EXTEND CE RTAIN EFFECTIVE DATES, filed by Air Transport Association of America, et al ., June 7, 2011, at 5.3

first principle, a single network of rules that int egrate with each other and with existing and affordably attainable technologies. The two rules in question here are set out in new Section 399.85 of the Statements of General Policy as subsections (b) and (c). Subsection (b) requires every travel agent with a c onsumer-facing website modify the operation of the site so that when a consumer selec ts a specific itinerary from among the options offered, the first screen quoting a fare for that i tinerary must (1) state that additional baggage fees may apply to that itinerary and (2) refer the consumer to either airline websites where the actual fees can be seen or to another place within the agent’s website if the baggage fee

information is available there. Subsection (c) goes further – it applies to all e-t icket confirmations issued by a travel agent at the completion of an online purchase or in a post-purchase email confirmation. Each of these actions is required to include (1) the passen ger’s free baggage allowance and (2) the fee for a carry-on bag and first and second checked bags. The information must be in either (a) text form in the e-ticket confirmation document or (b) a hyperlink to an airline website where the information is displayed. The rule mandates that t he fee information must be stated as specific fees applicable to that passenger’s precise purchas e, accounting for frequent flyer status, time of purchase and any other factor affecting the baggage charges. How this information, in this form, is to be found simultaneously at an airline website for a booking made on either an agent’s website or over the phone and through a GDS booking entry is not apparent to us. We will return to this issue shortly.4

I. THE BAGGAGE FEE DISCLOSURE RULE IS COMMERCIALLY RUI NOUS.

As is evident from ASTA’s earlier comments in this proceeding, travel agents are strong supporters of comparison shopping and the full disc losure of all costs that is implied by that approach to distribution. We also believe we under stand why the Department decided to advance a rule related only to baggage fees while i t considered the broader and more impactful question of full disclosure and purchase of optiona l fees at the point and time of air fare purchase. The chosen instrument, Section 399.85(b), is, however, not well suited as an interim solution to disclosure while the larger issue is pa rsed. There are several reasons for this. First, the rule requires a travel agency selling ai r travel through a web site to take one of two steps, the first an act of commercial suicide a nd the second legally and commercially dangerous. The rule requires, simultaneously with the first ex posure of the itinerary-specific fare, disclosure of the fact that additional baggage fees may apply to the chosen itinerary. The agency may comply by providing either a link to an airline website to see the “actual fees” or a link to another place within the agent’s web site where the information resides. But when the agency refers its customer to the web site of a competitor , 3 the airline whose itinerary has been selected by the consumer, it is effectively inviting the cus tomer to go away and not return. This, of course, is the approach labeled by the airline indu stry as “the most efficient means” to disclose baggage charges. 4 It may be efficient for airlines to disclose to th eir direct customers in this

3 We are, of course, aware of the “principle” that a principal and its agent do not by definition compe te with each other. We are pretty sure the Department understan ds that this idea has no application whatever to th e economic realities of air travel distribution where the prin cipals not only compete but have made it clear they want as much of the business to come to their websites as possible. 4 REQUEST TO CLARIFY THE FINAL RULE AND TO EXTEND CE RTAIN EFFECTIVE DATES, filed by Air Transport Association of America, et al ., June 7, 2011, at 3.5

manner but it is most assuredly not the most effici ent way for travel agents to disclose to the consumers that choose to buy air travel through the m. We are aware of no regulation anywhere that require s such a commercially damaging action by a retailer. There is no way, without lar ge expense, to create such links without causing the customer to leave the agency’s web site. Once departed, and aware of the baggage fees on that one airline, Airline A, the customer would hav e to re-enter the agency’s web site and reenter all the information for the trip in order to consummate the purchase on Airline A. While doing all this, the customer will be exposed to cha nges in the air fare that may occur while she is reviewing the baggage fee information to discern it s actual application to her itinerary. And if she is concerned about the magnitude of the charges and thinks there may be lower fees on another airline, Airline B, she will have to either return to the agency’s site for a link to Airline B or move to Airline B’s site directly, re-entering t he search information to determine if the total

cost there is more or less than the first airline. And so on to Airline C and, in some cases, D or E. The agency that sends his customer on this “journey ” is unlikely to see the customer again. A consumer faced with the ability to see on ly a part of the transaction, and realizing that baggage fees alone may drastically increase the tot al travel price, is not likely to return to the original site to complete only a portion of the tra nsaction. Threatened with loss of customers in such cases, ag encies will try to avoid this approach, as they should. The only other option, under the rule, is for the a gency to somehow acquire the ancillary fee data for all airlines and place that large volu me of information somewhere on its own website with a programmed link system such that a consumer who has made at least a preliminary choice of Airline A, for example, can go directly to Airli ne A’s ancillary fee information on the agency6

website. This seems simple enough to state, but in practice it is fraught with legal and practical difficulties, making it unreasonable as a substitut e for the true solution, which is airlines passing of ancillary fee information dynamically to the age nt in response to booking inquiries similarly to the way that fares are delivered. The legal problem arises because there are no airli nes thus far willing to commit to provide travel agencies with technically usable acc ess to their ancillary services/fees on a dynamic basis. Therefore, the only ways an agency could acquire the information from the airlines are to (1) have someone visit each airline website and literally copy and paste (and reformat) the ancillary fee information into pages of the agency’s own web site, or (2) attempt some type of web screen-scraping to capture the inf ormation in response to particular queries that are robotically entered on the airlines’ sites to replicate the consumer’s travel request. 5 Manually obtaining the information is impractical b ecause of the cost of manpower to achieve it initially and the manpower cost of const antly monitoring all airline websites for updates. The irony of this is inescapable – thousa nds of man hours of work, fraught with probability of error, to manually collect informati on that is readily available in electronic format but deliberately withheld by airlines, a major step backward. No agency could afford to do this without significant increases in fees it charges to consumers and damage to its reputation and business every time the information turns out to be out-of-date. And customer frustration with the need to wade through pages of rules to find out what their real baggage fees are will be palpable. The second approach, web scraping, has been found i llegal in every known case where it has been litigated. See the Temporary Injunction i n American Airlines, Inc.v. Farechase, Inc .,

5 We think this because the rule refers to “actual f ees” and not, for example, top collections of polic ies regarding fees and their application. If “actual fees” means something else, we would appreciate the Department’ s clarification.7

Cause No. 067-194022-02. See Southwest Airlines Co. v. Farechase, Inc. , 318 F. Supp.2d 435 (N.D. Texas 2004). Asking travel agencies to contin ually take the risk of suit by an airline over screen-scraping is too high a price to pay while th e ancillary fees rulemaking is moving to conclusion. If the end result of that rulemaking is a requirement that airlines provide ancillary fee information to travel agencies through GDSs, all of the issues involving massive manual labor, error-prone procedures and risk of inaccuracies wil l be eliminated. If the Department chooses another path, the consequences will have to be asse ssed, but it should not, in the meantime, impose huge costs and high risks on the retail dist ribution system while it concludes its analysis of the future course. The travel agency community i s not responsible for the airlines’ refusal to share the ancillary fee information and should not bear the costs of an interim solution. For the same reasons the Department should avoid an y approach that requires the programming work to be done twice. That is a likely outcome if the Department proceeds with section 399.85(b) while the ancillary fees rulemaki ng moves forward over the year-plus timetable that has been established. The magnitude of programming and other costs to either manually collect and display the data or the costs to screen-scrape the information will be very large, beyond the means of most small and medium si zed agencies. We again note the complaints of the airline associations about the IT costs of complying with 399.85(c). If those costs are large for the airlines, they will be giga ntic for travel agencies. Economic impacts of this magnitude would force most agencies with booki ng engine web sites to terminate them rather than face enforcement action by the Departme nt for failure to disclose or, worse, disclose inaccurately the ancillary fee data for a particula r passenger. Creating such incentives disserves consumers by further restricting the access points at which ancillary fee information can be reliably obtained.8

Finally, as noted earlier, representatives of virtu ally all airlines of consequence to the United States market have requested long extensions of time in which to try to comply with the rules that would have gone into effect on August 23 , 2011. The granting of substantially what the airlines seek will materially close the gap between the implementation of the rules and the third rulemaking on ancillary fees. This is a further co mpelling reason for the Department to defer implementation of these costly rules until a compre hensive decision is rendered in the fees rulemaking.

II. THE E-TICKET CONFIRMATION RULE WILL IMPOSE MASSIVE AND REDUNDANT INTERIM COSTS ON THE RETAIL DISTRIBUTION SYSTEM Section 399.85(c) presents even more formidable pro blems. As applied to travel agents, the fees for carry-on and first and second checked bags must be either (1) written in text on the eticket confirmation, or (2) revealed by hyperlink t o an airline website, or (3) revealed by link to a place on the agent’s website. Moreover, the fee “m ust be expressed as specific charges” that account for the buyer’s status and the particular b uying elements of the transaction. These include, but are not limited to, the traveler’s fre quent flyer status, the time of purchase relative t o departure, the time of day of the departure, the cr edit card used to make the purchase and any

other condition or status that affects the actual f ees to be paid by that passenger in order to be accompanied by her luggage. And this rule applies t o at least the 194 carriers who settle transactions through the Airlines Reporting Corpora tion.

This rule suffers from the same defects as the rul e in section 399.85(b) but there are

others. By definition the e-ticket confirmation follows the consummation of the ticket purchase. To understand the problem of compliance with sectio n 399.85(c), each of the options provided to a travel agency must be examined.9

First, there is the option to produce an e-ticket c onfirmation with the required disclosures in text. If the rule means what it appears to say, we do not understand how the calculation of the actual applicable baggage fees is to occur, taking into account all relevant criteria as determined by the policies and practices of the chosen airline . Doing this calculation requires a program to do the calculation and access to a timely and accur ate set of airline fee policies that can be read and manipulated by the program. Where would an age nt acquire such a program, since none

exists now? The agency could pay to create the program itself a nd integrate it into all of its other systems so that the e-ticket confirmation processor would read the calculation and include it in the confirmation. This program would have to be im plemented either by manual processes of collecting and inputting all relevant airline polic ies or by creating a robot program that would enter each airline’s website and find the policies. Such a program would be extremely expensive

to create and would be a solution at most for a han dful of the largest, wealthiest and most technologically advanced agencies. For the rest, th is is no solution at all. Moreover, to assure accuracy in the calculations, t hey must take place in real time, virtually concurrent with the execution of the rese rvation order. That in turn means that the agency must have created a programming interface th at can reach into the airline’s database, manipulate the controlling information and produce the list of fees for insertion into the e-ticket confirmation. There is no way an agency could accom plish this without the cooperation of the airline – in fact, every airline with baggage fee p olicies – and there is no indication that the airlines are going to cooperate with agencies in th is regard. And this process would easily be defeated by decisions the airline made to change it s website design or operation.10

The option to disclose the information by hyperlin k to the airline website(s) involved in the itinerary is not a solution. If there is more than one airline, the agency’s software would have

to be modified so that its confirmations would refe r to multiple websites when necessary. But to what does the agency link point? How is the airlin e’s website going to be aware that the agency has booked Passenger Jones on that airline in the a gency’s GDS? If the website is not aware, it

will not be able to do the calculations and create the complying information for the passenger who, upon receipt of the confirmation, may try to l ink to the airline to confirm the baggage fees. Writing a program at each airline to assure that ea ch carrier’s website would be aware of a GDS booking made by any agent on any airline and to do the baggage fee calculation would, we suggest, be an enormously costly undertaking. The new rules do not require the airlines to do this and, given their stated positions of antagonis m to sharing ancillary fee information with travel agents, it is most unlikely they would choos e to undertake the work or bear those costs. So we come to the third option, which is the trave l agency provides on the confirmation a link to its own website where the baggage fee discl osure will reside. The problem with this is the same one faced by the airlines but worse. The a gency would have to create programs that

would reach out to airline websites to somehow secu re the fee policies in all their complexity and conduct the calculation immediately upon the making of the reservation. If the creation of this type of program by 194 airlines is a costly underta king, it is simply impossible for the 9,977 travel agency firms in business on May 22, 2011. 6 If, on the other hand, the rule does not require t he calculation of specific charges as it appears to say, but requires only a link to a place where the chosen airline’s policies for baggage fees are set out, the rule becomes little more than an e-ticket version of the initial baggage fee disclosure rule in section 399.85(b). If that is w hat 399.85(c) really means, the rule is subject to

6 Data from Airlines Reporting Corporation.11

the same infirmities as 399.85(b) and should be def erred until a regulatory regime for all ancillary fees can be devised. There is a high like lihood that the work involved in complying with section 399.85(c) will have to be modified whe n the final rule in the supplemental rulemaking is issued. Enforcing the e-ticket rule s tarting August 23, 2011, means that agencies will inevitably incur incremental costs that could be avoided by doing the compliance work one time when the final rules are adopted in the supple mental rulemaking. We do not believe the GDSs are a potential source of solution to the problems recited above. The GDSs have the same problem as travel ag encies in securing the data from the airlines. To the best of our knowledge there is no system in place that will enable the tasks that appear to be required by section 399.85(c) in eithe r an airline or GDS environment. E-ticket confirmations are a real-time function so the only commercially viable process is one that delivers the fully vetted fee calculation electroni cally and immediately upon completion of the booking process. Even if one or more airlines decid ed to produce this calculation within their internal reservations systems in response to each a gency reservation, an extreme improbability,

no software exists that can reach into an airline d atabase and extract the completed calculation for insertion into an agency-generated e-confirmati on. It is clear, we submit, that the e-ticket confirma tion rule cannot be complied with in a commercially viable manner if it is interpreted as written. If, on the other hand, it only refers to airline policies, it remains an impractical solutio n and in some circumstances requires illegal actions by travel agents seeking to comply. The bes t course forward is to defer implementation of the rule until its implications can be thoroughl y debated during the supplemental rulemaking. By that approach there will be one set of disclosur e rules adopted at the same time that will have the benefit of full vetting of commercial, technica l and legal feasibility.12

III. CONCLUSION We emphasize in closing that ASTA is not opposed to fee disclosures on agency websites

and on e-ticket confirmations. Our concerns are th at the rules as written will impose huge and unnecessary costs on the industry, the effect of wh ich must inevitably be to drive still more agencies from the business of issuing airline ticke ts and to deter others from doing so using Internet technologies because the burden of complia nce will exceed any benefit the agencies stand to gain from using those technologies to sell and grow their business and offer the public more options for buying air travel. The superior pa th forward is to defer implementation of the baggage disclosure and e-ticket confirmation rules until they can be re-crafted in the context of a complete set of disclosure rules that have been ful ly debated and understood.

Respectfully submitted,

Paul M. Ruden Senior Vice President Legal & Industry Affairs