Order 2014-8-1

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Action on IATA Agreement

Issued by the Department of Transportation

on the 6th day of August 2014 

Served: August 6, 2014

 Docket OST 2013-0048

 

 FINAL ORDER

Summary

By Order 2014-5-7, issued May 21, 2014, the Department tentatively found that, subject to 

certain specified conditions, approval of International Air Transport Association (IATA) 

Resolution 787 would be in the public interest. We gave interested parties 21 days to file 

objections and seven business days for answers. Having now reviewed the comments, we have 

decided to finalize our tentative findings and approve Resolution 787 subject to the conditions 

specified.

Background

On March 11, 2013, IATA filed for approval by the Department under section 41309 of Title 49 

of the United States Code (the Code), and Part 303 of the Department’s regulations, an 

agreement that adopts Resolution 787 (Enhanced Airline Distribution). The agreement was 

adopted at the 34th meeting of the Passenger Services Conference (PCS) in Abu Dhabi, on

October 18-19, 2012.1

 Resolution 787 establishes a process for developing a technical standard 

for data exchange in the air transportation marketplace using Extensible Markup Language 

(XML).

2

 The resolution also establishes certain goals associated with using the new technical

standard, including the capability to provide personalized pricing offers to consumers who shop 

for air transportation. These goals are called the “New Distribution Capability” (NDC).3

 

 1 IATA memorandum PCS/Reso/156. 2 XML is a markup language that defines a set of rules for encoding documents in a format that is both humanreadable and machine-readable. 3 IATA specifies that it is not seeking approval for the NDC portion of this agreement, and nothing in our tentative 

decision or in this final order should be interpreted as reflecting any prejudgment or determination on our part 

regarding the NDC.

Agreements among Member Carriers 

of the International Air Transport 

Association concerning an agreement 

(Resolution 787) of the Passenger 

Services Conference
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Joint Motion

On January 22, 2014, following a substantial number of comments on the record, IATA, along 

with Open Allies for Airfare Transparency representing various sellers of air transportation and 

distributors of air transportation, including GDSs and agents, who had previously opposed 

Resolution 787, filed a joint motion urging the Department to approve the resolution subject to 

several agreed conditions.4 This joint motion proposed conditions, addressing the main areas of 

concern raised by opponents, including the scope of the resolution, the use of personal

information, the use of data transmission standards, data ownership, and backwards 

compatibility.

Tentative Decision

By Order 2014-5-7, after careful review of the record, including the Joint Motion and the 

comments filed in response, we tentatively approved Resolution 787 subject to certain 

conditions. We said that tentative approval of IATA’s application appears warranted because of 

our tentative conclusion that the modernized communication standards and protocols and the 

marketing innovation they could facilitate would be procompetitive and in the public interest, 

provided that certain safeguards were imposed. We identified those safeguards in the order and 

in the attached appendix to the order. We gave interested parties 21 days to file objections and 

seven business days for answers to objections.

Responsive Pleadings

We received a total of 41 comments and reply comments to Order 2014-5-7. Most were brief 

comments made by individuals. Two individuals, however, Edward Hasbrouck and Benjamin 

Edelman, filed more extensive comments, and nearly all of the other individuals who filed 

comments expressed support for the positions they took. We also received comments from the 

European Travel Agents’ and Tour Operators’ Association (ECTAA), the American Antitrust 

Institute (AAI), the Travel Technology Association (Travel Tech), and from Open Allies for 

Airfare Transparency (Open Allies). IATA filed a consolidated answer to the objections and 

comments.

Hasbrouck and Edelman Objections

Edward Hasbrouck stated that DOT should not approve Resolution 787 because the sale of 

tickets at personalized prices, as contemplated by the resolution, rather than in accordance with 

published tariffs, is contrary to the explicit and unambiguous provisions of 49 U.S.C. § 41510, 

and because DOT’s tentative findings are based on an unsupported misreading of that statute, 

which would render it meaningless.

5

 Benjamin Edelman also cited 49 U.S.C. § 41510 and stated 

that he objects to Order 2014-5-7 to that extent it would permit airlines to sell tickets other than 

 4 DOT-OST-2013-0048-0412. 5 DOT-OST-2013-0048-0416.
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in accordance with published tariffs. While he stated that he takes “no position on whether DOT 

should approve Resolution 787,” he asked that the Department “reaffirm carriers’ longstanding 

obligation to have tariffs and to charge only the fares provided by tariffs.”6

ECTAA’s Objections

European Travel Agents’ and Tour Operators’ Association raised a number of concerns 

regarding customer data, data storage and access to customer data and privacy considerations in 

general. ECTAA recommended that the resolution be adopted as a recommended practice only, 

and not binding for IATA members’ airlines and travel agents. ECTAA states that the 

implementation of Resolution 787 will be against the public interest because of numerous 

privacy issues and will seriously affect competition in the airline distribution market.7

AAI’s Comments

American Antitrust Institute does not oppose Order 2014-5-7; however, it expresses concern that 

language in our order could be misinterpreted as reflecting our approval of certain goals or 

aspirations of the NDC, thereby going beyond our limitation of our approval to the new 

communication standard only. AAI recommends that the Departments’ final approval should 

clearly state that its approval is only for the XML standard.8

 

Travel Technology Association

Travel Tech supports the Department’s tentative decision and states that it and its members are 

committed to working with all stakeholders to ensure that the principles of privacy, competition, 

choice, voluntary participation, and open standards are upheld and maintained in the future of 

travel distribution. 

Open Allies for Airfare Transparency

Open Allies for Airfare Transparency supports the Department’s Order to Show Cause. Open

Allies states that the Department’s conditions on Resolution 787 are consistent with promoting 

the important goal that passengers continue to be offered robust, diverse, transparent and 

competitive air transportation options and that the opportunity for comparative shopping by 

passengers be respected.9

IATA’s Consolidated Answer

On June 20, 2014, IATA filed a consolidated answer to the objections filed in response to Order 

2014-5-7.

10 IATA states that the objections filed in response to Order 2014-5-7 raise concerns 

only about conduct expressly excluded from the scope of Resolution 787 by condition. 

 6 DOT-OST-2013-0048-0417. 7 DOT-OST-2013-0048-0452. 8 DOT-OST-2013-0048-0456. 9 DOT-OST-2013-0048-0454. 10 DOT-OST-2013-0048-0457.
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Whatever the independent merit of those objections, they do not provide grounds for delaying 

prompt finalization of Order 2014-5-7.11

Decision

We have decided to finalize our tentative findings and to approve Resolution 787 subject to the 

terms and conditions specified in Order 2014-5-7 and attached in the Appendix to this Order. 

Having reviewed the objections, we find no persuasive argument that would lead us to adopt a 

different result. We emphasize that our approval is limited to the creation of an XML 

communications standard and that any future agreement among IATA member airlines regarding 

business models for the distribution of air transportation shall not be implemented without prior 

compliance with any applicable government approval or notification process.

We note first that Mr. Hasbrouck raised some of the same arguments concerning 49 U.S.C. 

§ 41510 prior to the issuance of our show-cause order, and we addressed them there.12 We have 

seen nothing in his objection that would lead us to alter those tentative findings and conclusions. 

Beyond that, as to both Mr. Hasbrouck and Mr. Edelman and all the other individual filers who 

raised tariff issues, we again emphasize that approval of Resolution 787 does not constitute 

approval of any agreements among IATA member airlines regarding any method or business 

model of distributing air transportation. The conditions also make clear that any future 

agreement among IATA member airlines regarding business models for the distribution of air 

transportation shall not be implemented without prior compliance with any applicable

government approval or notification process. Thus, the concerns raised are outside the scope of 

the present proceeding, and nothing in our present action is intended to preclude the objecting 

parties from raising them again as appropriate in subsequent proceedings. 

Regarding ECTAA’s concerns about collection and access to customer data, we note that nothing 

in our conditional approval of Resolution 787 authorizes any agreement on data collection. 

Also, Order 2014-5-7 requires individual airlines to honor their own and their agents’ privacy 

policies. Resolution 787 does not restrict or interfere with the ability of any government to 

enforce its privacy regulations and policies. In these circumstances, we do not view ECTAA’s 

concerns as a basis not to finalize Order 2014-5-7.

Finally, with regard to comments of AAI, we have already made clear, both in our show-cause 

order and here (see, e.g., note 3 supra), that the scope of our action goes to approval of the new 

XML standard, but not to approval of the NDC. However, to the extent that further emphasis 

might prove helpful, we reiterate the point again here and in Condition 1.a) in the attached 

Appendix.

 11 Id. at 1 12 Order 2014-5-7, at 14. For example, we said that “The clause in 49 U.S.C. § 41510 under which carriers are to charge only prices identical to 

those in the tariff ‘in effect for such transportation’ presumed filing of those tariffs with the Department under § 41504 as part of a comprehensive 

regulatory regime. Domestic tariff filing was terminated by the Deregulation Act of 1978. With progressive liberalization of international air 

services, including implementation of over 100 open skies agreements, the Department has, under § 40109(c) and 14 CFR Part 293, progressively 

exempted carriers from filing tariffs in liberalized international markets. Nor does 14 CFR 221 Subpart K still require carriers to post their tariffs 

for public inspection....” Id. Mr. Edelman raised concerns similar to those raised by Mr. Hasbrouck; their issues were addressed in the showcause order as well as with this final order.
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ACCORDINGLY, 

1. We make final our tentative findings, conclusions, and decision as set forth in Order 

2014-5-7, and we approve IATA Resolution 787 to the extent discussed therein and in the 

present order, subject to the specified conditions in the Appendix attached to this order; 

2. We will not entertain petitions for reconsideration to this order; and

3. We will serve this order on IATA and the parties listed in the service list attached to IATA’s

June 20, 2014, Consolidated Answer to Objections.

By:

Susan L. Kurland

Assistant Secretary for Aviation and International Affairs

(SEAL)

An electronic version of this document is available

on the World Wide Web at

http://www.regulations.gov
APPENDIX

Page 1 of 2 pages

CONDITIONS OF APPROVAL 

1. Scope of approval

a) Approval of Resolution 787 does not constitute approval of any agreement among IATA 

member airlines regarding any method or business model of distributing air transportation, nor 

restrict the use of any channels available for the distribution of air transportation, including 

indirect distribution by other than airlines. Approval of Resolution 787 is limited to the creation 

of an XML communication standard that will permit airlines individually to enhance distribution 

of their products.

b) Any future agreement among IATA member airlines regarding business models for the 

distribution of air transportation shall not be implemented without prior compliance with any 

applicable government approval or notification process. 

2. Use of Other Data Transmissions Standards

Approval of Resolution 787 does not constitute approval of any agreement among IATA 

member airlines to require the use of any particular data transmission standard(s).

3. Backwards Compatibility/Other Standards

a) Any communications or message standards or protocols developed under Resolution 787 

shall be open standards, meaning useable by distributors of air transportation and intermediaries 

in the distribution of air transportation, including CRSs and other aggregators, on a nondiscriminatory basis. 

b) Approval of Resolution 787 does not constitute approval of any agreement to prohibit 

individual IATA member airlines or groups of such airlines from continuing to utilize any 

communication or message protocol, including existing standards.

c) Nothing in the approval of Resolution 787 shall be deemed to be an approval of either a 

restriction on backwards compatibility or a restriction on development of a communications or 

messaging standard that is not backward compatible. Further, nothing in Resolution 787 shall be 

construed to inhibit the ability of distributors of air transportation to use other standards, 

including existing standards, in combination with any standard developed under Resolution 787. 

Notwithstanding any language in Section 1.2.4 of Resolution 787, airlines and technology 

service providers are free to pursue backward compatibility of Resolution 787 communications 

or message standards or protocols based on their particular business needs.
APPENDIX

Page 2 of 2 pages

4. Privacy and anonymous shopping

Approval of Resolution 787 does not constitute approval of any agreement among IATA 

member airlines to require the disclosure by any passenger of personal information of any kind. 

In addition, approval of Resolution 787 is conditioned on the airline or ticket agent that is 

requesting and receiving the personal information of the buyer of air transportation following its 

privacy policy in effect at the time the request is made for the sharing and storage of personal 

information.

5. Data ownership

Approval of Resolution 787 does not in any way address the issue of data ownership and 

specifically does not include approval of Section 1.2.7 of Resolution 787 or of any other 

reference to ownership in the Resolution.