u.s. Department of

Transportation

Office of the secretory

of Transportation

Memorandum

Subject:

From:

Notice of Communication:

~ocket: DOT-OST-2014-0056)

B~~

Acting Assistant General Counsel

.Office of Aviation Enforcement and Proceedings

Date: June 12, 2014

To: Chief, Dockets

Please place this memorandum and the attached document in the appropriate

file and in the Docket.

Communication:

Telephone Conference Regarding Regulatory Impact Analysis (RIA) Prepared in

connection with Transparency of Airline Ancillary Fees and Other Consumer

Protection Issues NPRM

Participants:

Blane Workie, Office of Aviation Enforcement and Proceedings

Kimberly Graber, Office of Aviation Enforcement and Proceedings

Daphne Federing, HDR Engineering Inc.

Thomas Gregorson, Airline Tariff Publishing Company (ATPCO)

Summary of Conversation:

On June 2, 2014, Blane Workie, Kimberly Graber, and Daphne Federing

participated in a telephone conference with Thomas Gregorson. Department

staff explained that they could not discuss the substance of the NPRM, and that

the discussion would be summarized and placed in the docket.

Mr. Gregorson stated that certain information stated in the Regulatory Impact

Analysis (RIA) prepared in connection with the Department's NPRM regarding

Transparency of Airline Ancillary Fees and Other Consumer Protection Issues is

incorrect.

Specifically the RIA stated that" ATPCO charges the airline approximately $3,000

per month to file ancillaries" on page 49. The Regulatory Impact Analysis cited a

Sabre document as the source of information. The cited information was stated

both in a Sabre document and in other publically available documents.
. ~~- •.. ,.

Mr. Gregorson questioned this number and stated that it does not seem to be

correct based on 2011 as well as current ATPCO pricing for ancillary services.

He explained that ATPCO does not charge airlines $3000 per month to file

ancillary service fee information. He noted that these numbers could be

significantly overstating the ATPCO costs associated to the airlines for the

distribution of ancillary fees. ATPCO requested a copy of the source document

for review.

Department staff informed Mr. Gregorson that both Department staff and HDR

examined a wide range of source material for evidence of the likely costs and

benefits of the proposed rule. This included direct requests for information from

businesses, including ATPCO, trade associations and other organizations that

might have relevant cost information (i.e., "primary" data); and information

from other published and unpublished research and analysis regarding those

costs (i.e., "secondary" data). To prepare an estimate for the likely additional

costs of filing information for ancillary services, HDR used a secondary source

which presented data on the additional per carrier fee to ATPCO for filing

ancillaries. The fee of $3,000 per month ($36,000 annually) was used to estimate

the cost for transmitting that data, whether paid by carriers as a direct fee to

ATPCO or recovered in another manner.

Department staff further informed Mr. Gregorson that the Department always

welcomes additional and clarifying information directly from interested parties.

Department staff and HDR will carefully evaluate all comments submitted

during the public comment period, including any comments submitted by

ATPCO, in order to refine its estimates of costs and benefits of the rille.

Mr. Gregorson also requested a copy of the source document. We are providing

the requested information to ATPCO and it is also attached here.
;

'.

r=------------.------------------~

Ancillary fee disclosure using ATPCO-OC

--- - _., -- .."--- ..-,----"., ...~._~.-.-,-.._.__ .,_ .. _ .._ •.•....._ ..'~ ...-....,..._ ..... _ ...,~....,-,".-.,.,._ .., .._--

• For these consumers to be apprised of the true total price of air transportation, at least ..

core ancillary fee information must be transmitted and presented to agents in an

automated, efficient, and readily useable manner via the systems agents use by agents

to comparison shop for air travel services - i.e. the GDSs

;. 10 ensure this, airlines must transmit this information to the GDSsusing the AIPCD-DC

data standard (unless and until the airline and GDSagree to a different process or data

standard other than that of the airline-owned AIPCD)

• All major UScarriers have tested AIPCD-DC, and the GDSshave invested

significantly to support this data standard

,. Airlines already use AIPCD to file published and private fares, and the carriers can now

file ancillaries via AIPCD, with the ability to dynamically manage ancillaries

• Ancillary information can be filed through AlPCD as part of the carrier's overall

fare filing process, or directly with the GDS(using the DC data standard)

• AlPCD charges the airline approximately $3,000 per month to file ancillaries

• DC data standard already accommodates 130 different categories of ancillaries -

for which price/applicability can vary by 9 frequent traveler tiers (see slide in

......-Appe-ndi.x-i~x~ain~r:tg-h.QWATP-CQMm-e.Rabl@.s.-a.RGiUar-i@..s-tob@. ..V~€kjmanageG). . .
GDS system enhanced for ancillaries

Technical Standards Enable Broad and Rapid Deployment of Ancillaries

Availability, Seats, FF#

ANCILlARIES

No GDS fee for selling ancillaries

\.~.J \.~) \.~J

\.~J \.~J \.~.J

\~) \.~J \.~.1

\~/\~)\.~.J

100's of

airlines

Edifact or XML

BASE FARES

Public IPrivat~ I Fitre Rules

ANCILlARIES

Public IPtivote Ifore Rules

TransKtlonal (or notl

Fl' TIer level

Edifact or XML

BASE FARES

Publi(. I Private 1 Fare Rules

ANCillARIES

Public IPrivate I Fa•• Rul••

TransKtIcNoI(or noll

Fl' Tier level

Global ARCBSPs II

Airline Tariff

Publishing

Company

G S

SHO ING

ENGINE

Hundreds of

Airlines

Millions of

Fares

Billions of

Combinations

FULFillMENT

ANCillARIES

Electronic Mise. DoaJlnenls

AGENT

WORKSPACE

CORPORATE

BOOKING

TOOL

OTA's

I