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Interactive Travel Services Association

Our companies are your gateway to the world . . .

Presentation to 

The Advisory Committee for Aviation Consumer Protection,

June 28, 2012

Joseph Rubin, President
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Chairman Madigan and Members of the Advisory Committee for 

Aviation Consumer Protection:

My name is Joseph Rubin, and I am the President of the 

Interactive Travel Services Association (ITSA). 

Thank you for the opportunity to appear before you today.

We believe that the Consumer Protection division of the 

Department of Transportation does a very good job carrying out 

the mandate of their office, but we welcome the entry of another 

outlet for consumer voices to help the Department establish timely 

and effective rules to fulfill their consumer protection mission.

I plan to make a few points this afternoon:

What the Independent Travel Distribution system is, and why 

it is an important component to the aviation system, and 

indeed to all travel in this country;

How the independent travel distribution system plays an 

important role in consumer protection, and how our interests 

are aligned with consumer interests; and

Why the initial focus of this Committee should be on the 

transparency and transactibility of airline ancillary fees, and 

how that could protect consumers from deception, and save 

them significant time and money.

Who We Are:
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Members of ITSA are independent travel distributors - that is, we 

are not controlled by travel providers.

In the travel space, that is an important distinction – it means that 

our search results, our rankings and our consumer information is 

not biased by interested parties. 

We are 3rd party travel distributors: one of our roles is to help 

airlines sell and distribute their seats, and to help consumers find, 

compare and purchase the flights and other travel services that 

best fit their needs. That is, we foster competition and lower 

prices among airlines, and provide them with a valuable service.

ITSA members are technology companies. The sophisticated, 

innovative and technologically savvy companies that make up 

ITSA’s membership are some of the most cutting-edge, award 

winning and advanced technology companies in the world.

You are no doubt familiar with ITSA’s Online Travel Company 

(OTC) members – the OTCs were one of the first industries to 

recognize and take advantage of the power of the internet to 

provide consumers with unbiased search results, the ability to 

research and comparison shop, and purchase any travel service 

they need from the comfort of their home, or increasingly from 

their mobile devices. In fact, about one-third of the world’s travel 

is booked on line, and about one third of all U.S. e-commerce is 

travel related.

You may be less familiar with ITSA’s Global Distribution System 

(GDS) members. These companies power the world-wide airline 

market, consolidating schedule and fare information for more than 

500 airlines world-wide, analyzing billions of flight possibilities, 
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and delivering accurate, relevant and organized flight results 

thousands of times every second.

GDS companies are the backbone of flight distribution, selling 

approximately 50% of all airline tickets in the U.S. They invest 

billions of dollars in technology and jobs, developing innovative 

ways to bring products to market, and working with their airline 

partners, travel agents and others to develop and run technology 

and reservations services and provide other technology 

requirements.

ITSA and consumer traveler interests are aligned:

With that background, let me explain why independent travel 

distribution plays an important role in consumer protection.

Among other things, both consumers and the companies that 

ITSA represents seek to maximize and improve the consumer air 

travel experience, including:

Easy and efficient purchasing of air transportation

Maximum information, transparency and transactibility

Competitive airfares

Minimal travel hassle and no surprises; and 

vigilance against unfairness and deception. 

ITSA members and consumers thrive on openness and 

transparency

ITSA supports DOT rules to increase transparency and 

disclosure, and we filed an amicus brief in support of DOT’s 

“Full Fare Advertising” Rule against a challenge brought by 

some US airlines.
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ITSA’s Recommended Consumer Protection Agenda: the 

transparency and transactibility of airline ancillary fees

With that as background, let me turn to one area in particular 

where we see problems with the market, where the need for 

additional consumer protection is strong, where specific action 

would protect consumers from unfairness and deception, and 

where the stage has already set by the Department of 

Transportation:

We recommend that the initial focus of this Committee should be 

on the transparency and transactibility of airline ancillary fees.

Airline ancillary fees: see it, compare it, and buy it

Consumers want and deserve the right to compare the “all-in”

cost of airfare across carriers, and to purchase the core services 

they need, such as pre-assigned seats, advance boarding, and 

checked bag fees, in the same manner that they buy their tickets -

what I have referred to as "transactibility."

However, since “unbundling” began in earnest a few years ago, 

many airlines will not disclose these core ancillary fees to ITSA 

members and other 3rd parties to enable such comparison 

shopping and purchase, even though these fees may add 20% or 

more to the overall cost of air travel. 

We do not begrudge the airlines the opportunity to charge for 

these services as they attempt to remain profitable, as we all have 

a shared interest in that, but we are concerned about the way in 

which they are sold.
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At the present time, the only opportunity for consumers to directly 

compare all-in airfare costs is to click back-and-forth between 

various sites, such as between an online travel company to get 

the base fare and then the airline website to determine the fees 

for ancillary services. And the only way to purchase these 

services is through the airlines directly, adding unfairness, cost, 

time and inconvenience to consumers’ travel planning.

ITSA members have proposed and supported a simple, 

inexpensive and technologically feasible solution that does not 

impose price or other controls on airlines, and that dovetails with 

some of the Rulemaking Proposals that the Department has 

already announced that it is exploring.

ITSA’s proposed solution: 

Preserve and Enhance Comparison Shopping and Transactability 

for Consumers 

ITSA recommends that the Commission work with the Department 

on the proposed Consumer Protection Rule III to ensure that it is 

released as expeditiously as possible, and that it contains limited 

and timely intervention by the Department of Transportation to 

require disclosure and transactibility of core ancillary airline 

services and fees to those distribution channels that the airlines 

are already doing business with. 

The Department already appears headed down this path, but we 

would urge this Committee to nudge them in that direction and 

support those efforts. 
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The fact is, the technology, processes and data already exist to 

make the transparency and transactibility of airline ancillary fees 

for consumers a reality, and at a minimal cost.

This solves the problem for consumers, and does so with as little 

regulatory intervention as necessary.

This is not a fight between airlines and their distributors; it is a 

fight against unfairness in airline pricing mechanisms, with a 

simple, feasible solution. 

Unfortunately, there is an economic disincentive for the airlines to 

release this data to ITSA members and other distribution 

channels, in that the airline that goes “first” is likely to display 

higher costs, and thus show up lower in search results, making 

them appear more expensive than their competitors. The only 

solution in this situation, therefore, is to have DOT break this 

logjam through a disclosure requirement that imposes a minimal 

disclosure burden on all airlines concurrently.

Airline arguments that you may hear:

Unfortunately, you may hear the airlines oppose this simple 

disclosure, or claim to be supportive, but then throw roadblocks in 

the way. Allow me to address some of the arguments they have 

raised in the past:

We’d like to do it, but the distribution mechanisms, and 

particularly the GDS members of ITSA, do not have the 

technology or capability to do so.
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Response: The response to this claim is simple and 

straightforward: yes we can. The GDSs are some of the most 

innovative, advanced and award-winning technology companies 

in the world, and they actually run the booking systems and 

websites that many of the airlines use for their own booking 

purposes. This argument simply rings hollow.

The GDSs have “monopoly power”, and such a rule would 

force the airlines to give up one of their bargaining chips 

against this monopoly power.

Response: This claim, too, has no merit. First, the GDSs sell 

about half of all airline tickets, which on its face appears to lack 

monopoly power, and the GDS companies compete vigorously 

between themselves for that slice of the pie. Not only that, but 

that share of the market is lower today than it was a few years 

ago. Additionally, distribution costs are dropping, not rising. 

Lower market share and lower prices appears to belie the claim 

that the GDSs are monopolists.

The information is already available on the airline websites, 

so no further action is needed.

Response: The information that is available on the airline web 

sites, which, by the way, is required by DOT, otherwise it might 

not have been made available at all, is a static list that does not 

enable consumers to accurately compare all-in airfares across 

carriers. For example, the airlines may present consumers with 

ranges of costs, rather than the real costs that consumers are 

going to have to pay for their seat reservations and baggage 

costs. This is a step in the right direction over not displaying 
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those fees at all, but is not nearly enough to overcome the 

concern about unfairness and deception.

Other Consumer Protection Proposals in CPIII

The Department’s CPIII inquiry also contained a number of 

questions regarding other possible consumer protection activities 

that the Department may be considering, such as disclosure of 

travel agent “incentives” and prohibiting “display bias.”

ITSA believes first of all that these secondary or even trivial 

issues should not delay or detract from what should be the 

overriding consumer protection goal of transparency and 

transactibility of core ancillary services, and that these other 

questions are already generally addressed through DOT’s current 

non-bias display requirements.

Conclusion:

Independent travel distribution companies play a vital role in 

protecting consumer interests and enhancing competition among 

travel providers. This Committee’s recommendations should urge 

DOT to ensure that the consumer benefits of independent, third 

party travel distribution are not degraded by airline efforts to 

restrict their fee content in unfair or deceptive ways. A timely 

rulemaking that requires transparency and transactibility of core 

ancillary fees is the solution we are seeking. 

Thank you, and I look forward to answering any questions.