BEFORE THE 

U.S. DEPARTMENT OF TRANSPORTATION 

WASHINGTON, DC 

Comments of ) 

ORBITZ WORLDWIDE, LLC. ) 

 ) Docket No. OST-2013-0048 

On the Agreement Adopted by ) 

The Passenger Services Conference of ) 

The International Air Transport Association (IATA) ) 

As Resolution 787 ) 

COMMENTS ON APPLICATION FOR APPROVAL OF AN AGREEMENT (RESOLUTION 

787) BY THE INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) 

Orbitz Worldwide submits the following response to the March 11, 2013 application by 

the International Air Transport Association (IATA) for Department of Transportation (DOT) 

approval of its agreement adopted as Resolution 787. 

Orbitz Worldwide is a leading global online travel company that uses innovative 

technology to enable leisure and business travelers to research, plan and book a broad range of 

travel products. Orbitz Worldwide owns a portfolio of consumer brands that includes Orbitz 

(www.orbitz.com), CheapTickets (www.cheaptickets.com), ebookers (www.ebookers.com), 

HotelClub (www.hotelclub.com) and corporate travel brand Orbitz for Business 

(www.orbitzforbusiness.com). In addition, our Orbitz Partner Network offers a full range of 

private label solutions to other partners who wish to sell travel, including many of the world’s 

leading airlines and the American Express Consumer Travel Network. 

On behalf of the millions of travel consumers who use our sites, Orbitz Worldwide is 

interested to learn more detail about the development of Resolution 787 and the included New 

Distribution Capability (NDC). The fact that so many questions remain unanswered, and that the 

only notable support for the NDC comes from IATA and its members suggests that the 

Department will be challenged to find ways that this proposal is in the traveling public’s best 

interest. As a company that prides itself on providing expert travel advice by using cutting-edge 

technology, we recognize the benefits of developing new technology and modernizing business 
processes to improve the consumer experience. At the same time, we also remain fully 

committed to the preservation and expansion of transparent comparison shopping, consumer 

choice, and consumer data protection and privacy. These broad goals are not mutually exclusive, 

but could be at odds under the IATA proposal. 

The introduction of NDC into the marketplace impacts all levels of the travel supply 

chain and raises some implications for the protection of consumer privacy. Section 3.1.1 of the 

application appears to allow airlines the right to demand personal traveler information that 

“includes but is not limited to the customer’s name, age, marital status, nationality, contact 

details, airline loyalty program numbers, prior purchase and travel history, and whether the trip is 

business or leisure.” The nature of many of these classifications raises significant questions as to 

the relevancy and intended use of this private information. As these categories expand (and even 

with the current list of categories), much of this information may not be sufficiently relevant to 

the carriers’ legitimate business interests to justify the intrusion into personal privacy. At what 

point in the developing menu of traveler information sets will personal data be deemed off-limits 

to carriers, and who will make that determination and enforce its non-collection? 

Furthermore, we see significant risk that this new “personalization scheme” will be used 

to drive price discrimination against certain travelers based solely on personal attributes. In order 

to maximize revenue, airlines have implemented very effective revenue management systems 

that charge different prices for different tickets based on supply, demand, advance purchase 

window and other criteria relating to the service being purchased. To extend the reach of such 

revenue management systems beyond the attributes of the ticket being bought to the attributes of 

the individual making the purchase is something that we believe would introduce significant 

risks to consumers, and would be unprecedented in any industry. 

If access to fare and fee data hinges upon the provision of traveler-personal information, 

what will that mean to consumers looking to comparison shop, and to businesses such as our 

website Orbitz.com, which facilitates that comparison shopping? What will it mean when 

travelers seeking price quotes and itinerary options turn to online or traditional travel agents, 

who must now collect significant amounts of data from each traveler for each exploration of 

fares across suppliers? How will the NDC scheme alleviate the growing consumer confusion 
over ancillary airline fees and services? Will those consumers who reject this demand not be 

granted anonymous means of access to the lowest possible fares and fees or the best scheduling 

choices? IATA has not addressed why this information is ultimately necessary, or how 

consumers who do not want to reveal their private and personal identifying information can still 

obtain access to the best fares, fees and flights. We would also be interested to learn which 

nation’s privacy standards will dictate the handling of consumers’ personal information collected 

by carriers under the worldwide NDC schema, since they vary widely. 

It seems that the airline industry is looking at other marketplaces and trying to emulate 

what might be happening there and applying it to its industry. Indeed, healthcare exchanges are 

expected to be a useful tool for consumers to compare and access health insurance—going so far 

as being referred to as “an Orbitz for health insurance” (see attachments). And in the process of 

collecting information for the healthcare exchange quote, personal data like age, sex and marital 

status might be secured in order to offer the consumer price and plan options. But that is for data 

to be used in an actuarial model that measures risk factors. Airline passengers should not be 

treated in the same manner. There is no “risk” in selling a consumer an airline ticket. If anything, 

the risk is on the consumer, because most airlines have very restrictive fare rules that penalize 

the customer, not the airline, for any change of plans or special circumstances. 

We are significantly concerned that airlines could use personal information gathered in 

this way to suppress competition and reduce consumer welfare by stifling businesses such as 

ours that enable price comparison and ensure a level playing field. Specifically, we are 

concerned that airlines would use the personal identifying information revealed as part of a 

search on a price comparison website to immediately remarket to that consumer directly, using 

information about the trip already revealed—information that is not currently available to airlines 

under the current model, but would be made available under IATA’s proposal. To do so could 

significantly weaken the business model of an intermediary and reduce price comparison options 

available to consumers. We find it particularly troubling that it is an industry association that is 

seeking to make this change rather than a collaborative effort involving all stakeholders, and see 

significant risk that this scheme will be used as a means to favor single supplier websites over 

websites that offer consumers choice and the ability to compare. 
Airlines are our suppliers and business partners and we have every reason to see the 

industry flourish. But Resolution 787 looks to be a way to give airlines leverage by limiting 

consumer choice and access to an open marketplace. IATA has created the controversy 

surrounding the NDC proposal by choosing to exclude affected parties and raising consumer 

privacy issues and has built a steep hill for the Department to climb to reach a determination that 

Resolution 787 is in the public best interest. 

Sincerely: 

Chris Chiames 

Vice President of Corporate Affairs 

Orbitz Worldwide 

500 West Madison Street, Suite 1000 

Chicago, IL 60661 

(312) 260-2344 

chris.chiames@orbitz.com 
More than 100,000 U.S. employees will be able to

sign up for health insurance through a new

corporate exchange launched by Aon Hewitt.

More than 100,000 U.S. employees

at mid-sized businesses will sign

up this fall for health insurance

through a new corporate exchange

with the ability to choose plans

from multiple carriers.

Aon Hewitt (AON), the human

resources and health benefits

consultancy, said Thursday its

exchange will turn “selecting

health benefits into a retail

shopping experience” akin to

Amazon.com (AMZN), Orbitz

(OWW) and others. The benefits will be offered by nine national and regional

carriers, including UnitedHealth Group (UNH), Cigna (CI) and Health Care

Service Corp., which operates Blue Cross and Blue Shield plans in Illinois,

Texas, Oklahoma and New Mexico.

The effort is similar to the exchanges that are being created by states that will

offer health options to uninsured individuals and small businesses in 2014

under the Affordable Care Act signed into law two years ago by President

Obama.

But Aon Hewitt said its model will offer group health insurance to employers

with more than 100 workers who are not eligible to use the state or federally

operated exchanges at least until 2017. These employers are not self-insured

and generally don’t have as many choices as they exchange plans to offer.

Rather, they purchase so-called fully-insured health plans that are regulated

by states.

Each employer in the exchange decides on the subsidy or “credit” that each

worker will get to purchase coverage. Then, the employees take to the

exchange to select their coverage. The subsidy will vary from employer to

employer.

No matter what happens to the future of the Affordable Care Act depending

on the outcome of the federal presidential election, an Aon Hewitt

PHARMA & HEALTHC ARE | 9/27/2012 @ 12:00AM | 24,530 views

In Boost For Insurance

Exchanges, Aon Launches Retail

Health Plan Shopping

Bruce Japsen, Contributor

I write about health care and policies from the president's hometown

In Boost For Insurance Exchanges, Aon Launches Retail Health Plan Shop... http://www.forbes.com/sites/brucejapsen/2012/09/27/in-boost-for-insura...

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spokeswoman said its “model will exist with our without the state or federal

exchanges.”

The hope by those involved is it will make health plans more competitive and

lead to better prices for consumers just like online retail shopping has done

in other industries.

“There are examples in every industry, including iTunes, Amazon.com and

Orbitz, where the introduction of competition on a retail, consumer level has

driven down prices and made the industry more efficient,” said Ken Sperling,

Aon Hewitt’s national health exchange strategy leader. “The Aon Hewitt

Corporate Exchange is a viable alternative for companies searching for

solutions that can reduce cost, transfer risk to insurers, empower employees

to make smarter health care choices and create a more sustainable health

care benefit program.”

Among the companies expected to participate include Sears Holdings

(SHLD), according to sources close to the exchange and its participants.

“Private health care exchanges enable employers to offer a wide range of

health insurance options so their employees can choose a health care plan

that is best suited for them and their families,” Elizabeth Winsor, chief

executive officer of UnitedHealthcare National Accounts, said in a statement.

This article is available online at:

http://www.forbes.com/sites/brucejapsen/2012/09/27/in-boost-for-insurance-exchangesaon-launches-retail-health-plan-shopping/

In Boost For Insurance Exchanges, Aon Launches Retail Health Plan Shop... http://www.forbes.com/sites/brucejapsen/2012/09/27/in-boost-for-insura...

2 of 2 5/1/2013 9:27 AM
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What are Health Insurance Exchanges

Exchanges are the central mechanisms created by the health reform bill to help individuals and small businesses

purchase health insurance coverage. Beginning in 2014, an Exchange will be established in each state to help

consumers make valid comparisons between plans that are certified to have met benchmarks for quality and

affordability. The Exchanges will also administer the new health insurance subsidies and facilitate enrollment in

private health insurance, Medicaid and the Children's Health Insurance Program (CHIP). Nobody will be required to

purchase health insurance through the Exchange, though subsidies will only be available for plans sold through the

Exchange. If you would prefer to buy your insurance through an insurance agent or broker, you will be free to do so.

If not, you will be able to purchase insurance in a matter of minutes on the Exchange’s website.

The District of Columbia is currently in the planning stages for implementing the Exchange.

How the Insurance Exchanges Will Work

The Exchanges are being compared to websites such as Travelocity or Orbitz, but they’ll be set up for you to buy

health insurance rather than book travel and hotels. Starting January 1, 2014, those who want to buy private health

insurance for themselves and their families will be able to use these state-run exchanges to find better deals. Instead

of searching individually for an insurer, you’ll be able to use the exchange to choose a private plan from a menu of

options. Plans cannot refuse to sell you a policy and must comply with the new consumer protections.

Insurance plans will vary—from generous to modest—but each plan must include basic, comprehensive medical

coverage and prescription drug benefits. As with the online travel services, you’ll be able to compare the plans’ costs

and benefits head-to-head online. What policies will cost is not yet known, but there will be annual limits on how much

you have to spend on your deductible and copays. Subsidies or tax credits will be available if you have a low or

moderate income.

More information on the Exchanges is available here.

Program at a Glance

Program Title: What are Health Insurance Exchanges

Type: Outreach and Education

Goals

The health reform bill to help individuals and small businesses purchase health insurance coverage.

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1 of 2 5/1/2013 9:04 AM
View this article online: http://www.insurancejournal.com/news/midwest/2013/02/19/281470.htm

Michigan Lawmakers Mull $31M For Health

Care Exchange

Michigan Gov. Rick Snyder’s administration told lawmakers it needs their approval within weeks to spend

a $31 million federal grant to help build a consumer-friendly health insurance marketplace under the

contentious federal health care overhaul, or else the state will be stuck with a bill.

Though Republicans rejected the GOP governor’s request to spend federal money on a state-run exchange

last year, the issue is not going away because open enrollment for hundreds of thousands of uninsured

Michigan residents is less than eight months away. The new online exchange, likened to Travelocity or

Orbitz, is supposed to make it easier for people and businesses forced to carry health insurance under the

Affordable Care Act.

Snyder now is pursuing a partnership exchange controlled primarily by the federal government. If

legislators do nothing, federal officials could set up and run the marketplace.

Either way, the state has to make technology changes to link electronically with the federal exchange

because it will be used to determine people’s eligibility for Medicaid and – if they buy private insurance on

the exchange – whether they qualify for income-based federal aid to help pay their premiums.

“We are still going to get calls. People are going to be coming to the state with questions. That is an

administrative cost,” Chris Priest, who is managing the state’s exchange project, told a House budget

subcommittee.

Spending the $31 million grant will save the state from having to divert its own dollars from elsewhere in

the budget, he said. He also argued that having a partnership will save Michigan insurers wanting to offer

health plans on the exchange from an extra layer of regulation in Washington.

Another benefit is while the U.S. government will run the website and call center, the state will have an

oversight role and be able to hire customer-assistance specialists so people can get face-to-face assistance,

Priest said.

Snyder’s request is renewing debate within the GOP-led Legislature over whether to accept that President

Barack Obama’s signature domestic achievement is the law, or to fight it every step of the way.

“I don’t support Obamacare, but I don’t have (an) Obamacare phobia – whereby I think it’s just going to

go away if we do nothing,” said Rep. Al Pscholka, a Stevensville Republican. “On Oct. 1 there’s going to

be an exchange and on Jan. 1 of ’14 you have to have health insurance or pay a fine.”

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He said it makes no sense for Michigan-based makers of medical devices – which will start paying a 2.3

percent tax in 2014 to help pay for the law – to see their taxes not used for the exchange.

But Rep. Anthony Forlini, a Republican from Macomb County’s Harrison Township, is on the fence. He

expressed concerns that the government-run marketplace will undercut private insurance agents and

wondered if it would be better to send all calls related to the health care law to federal officials.

“I’m trying to figure out how to get to a yes,” Forlini said.

Many business groups friendly to Republicans support appropriating the $31 million grant, but

conservatives and tea party groups oppose it along with Snyder’s call to expand Medicaid under the

Affordable Care Act.

Grassroots in Michigan founder Joan Fabiano said if legislators turn down the money, they can thwart the

federal government’s move to carry out the law.

“It’s highly unlikely at this point that a federal government that is in debt and out of money has the means

to implement it in well over 20 states that are refusing to implement it themselves,” she said.

A Senate budget subcommittee plans to get a similar update on the health exchange Thursday. Snyder

wants a spending bill sent to his desk by the end of this month, and it is unclear when or if lawmakers will

act.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast,

rewritten or redistributed.

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