CONSUMER RIGHTS AND TRANSPAREN

IN THE TRAVEL MARKETPLACE

PREPARED FOR

Advisory Committee for Aviation Consumer Protection

August 7, 2012Chris KroegerSenior Vice President, Sabre TravDavid SchwarteSpecial CounselFormerly Executive Vice PresidenShelly TerrySenior Director, Sabre Travel Netw

Advisory Committee for Aviation Consumer Protection

(ACACP) 

Presented on behalf of Sabre Holdings, August 7, 2012
What’s at Stake? Consumer rights—transparency and total travel c

The Role of the GDS—a marketplace delivering value to buyers and 

of travel

Enabling Transparency in an Efficient Travel Marketplace—enhanc

AGENDAOur discussion today

Enabling Transparency in an Efficient Travel Marketplace—enhancenable new airline merchandising initiativesIATA Claims and New Distribution Capability Proposal—the realityand impact to consumersCall to Action—consumer protections are needed

Presented on behalf of Sabre Holdings, August 7, 2012 
What’s at stake? Consumer Rights

Transparency and total travel costs

Presented on behalf of Sabre Holdings, August 7, 2012 
CONSUMER

CONSUMER SHOPPING and BOOKING OPTIONSPrice transparency should be a consumer right in all channels through which an airlito sell its tickets

About half opurchases in estimated at via a travel abrick and moThe remaind

SHOPPING and BOOKING OPTIONS

LEISURE

TRAVELER

airline.com

CALL THE

AIRLINE

AIRLINESYSTEM

The remaindat 48 %—are directly from 

CORPORATE

TRAVELER

CORPORATE

BOOKING

TOOL

OFFLINEAGENCY

ONLINE

AGENCY

METASEARCH

e.g, Kayak, Google

MULTI-AIRLINE

SHOPPING

ENGINE

Presented on behalf of Sabre Holdings, August 7, 2012 
Base

Air Fares

CONSUMER RIGHTSPutting the pieces in place

DOT regulations have played an important rolein airline fare transparency.

5 Presented on behalf of Sabre Holdings, August 7, 2012
Base

Air Fares

Government 

Taxes and Fees

Airline Fuel 

Surcharges

CONSUMER RIGHTSPutting the pieces in place

DOT regulations have played an important rolein airline fare transparency.

6 Presented on behalf of Sabre Holdings, August 7, 2012
Base

Air Fares

Government 

Taxes and Fees

Airline Fuel 

Surcharges

Airline Baggage 

Fee Disclosure

CONSUMER RIGHTSPutting the pieces in place

DOT regulations have played an important rolein airline fare transparency.

7 Presented on behalf of Sabre Holdings, August 7, 2012
Base

Air Fares

Government 

Taxes and Fees

Airline Fuel 

Surcharges

Airline Baggage 

Fee Disclosure

CONSUMER RIGHTSPutting the pieces in place

DOT regulations have played an important rolein airline fare transparency.

But a piece of the regulatory p

8 Presented on behalf of Sabre Holdings, August 7, 2012
THE ISSUE and WHAT’S AT STAKE

Consumer protections are needed to ensure travelers can both compare the full costof air travel and buy essential services wherever airlines choose to sell their tickets

Ancillary fees paid by consumers in 2011 were $22B and continue Shrouding of ancillary fees hides the full cost of air travelFederal preemption of state consumer protection laws requires tconsumers rely on the Department of Transportation for protectiDOT should protect consumers by ensuring transparency of the tof air transportation through all channels where airlines sell thei

REGULATION IS NEEDED

TO PROTECT CONSUMER RIGHTS

Presented on behalf of Sabre Holdings, August 7, 2012
The Role of the GDS

A marketplace delivering value to buyers and sellers 

Presented on behalf of Sabre Holdings, August 7, 2012 
Access to Buyers

Product Placement

SELLERS MARKETPLACE 

CompariChoice 

MARKETPLACES BRING BUYERS AND SELLERS TOGETHER Sabre operates an electronic travel marketplace

EXAMPLESNYSEE*TradeeBay

AmazonApple App StoreSabre Travel Network

Product PlacementGeographic Reach

Choice Conveni

Presented on behalf of Sabre Holdings, August 7, 2012 
AIRLINE

HOTELCAR

TRAVEL SELLERS TRAV

SOLUTIONS BUILT AROUND A MARKETPLACECONNECTING BUYERS AND SELLERS OF TRAVELEfficiently enabling comparison shopping and buying of travel

Sabre

TRAVEL

350,000 

Tens of million

CARCRUISERAILTOUR

TRAVEL

MARKETPLACE

GOVERNMEN

Go

AT-HO

Tens o

Presented on behalf of Sabre Holdings, August 7, 2012 
AIRLINE

HOTELCAR

TRAVEL SELLERS TRAV

PROVIDES VALUE FOR ALL CONSTITUENTS

Sabre

TRAVEL

350,000 

Tens of million

CONSUMERTransparency Enhanced Customer ServiTime Savings

SELLER

Global Reach

Product Differentiation CAR

CRUISERAILTOUR

TRAVEL

MARKETPLACE

Go

AT-HO

Tens o

CORPORATIONand GOVERNMENTTransparency and Cost CoService, End-to-EndTraveler Security

OFFLINE and ONLINE AComparison shoppingAbility to Service the EntiProcess efficiency

Premium Revenue

Data and Business Insight

Presented on behalf of Sabre Holdings, August 7, 2012 
Enabling Transparency

in an Efficient Travel Marketplace

Enhanced to enable new airline merchandising init

Presented on behalf of Sabre Holdings, August 7, 2012 
BASE FARES

Public | Private | Fare Rules

INVENTORY

Sabre TRAVEL MARKETPLACEEnabling transparency in an efficient travel marketplace—simplifying complexity

Sabre TRAVEL 

MARKETPLACE

SHOPPING 

SCHEDULES

Online | Interline | Codeshare

Public | Private | Fare Rules

(ATPCO or Direct Filed)

(ARC, Global BSPs or Direct)

SHOP

BOOK

PRICE

FULFILL

SETTLE

SERVICE

SHOPPING 

ENGINE

HUNDREDS

of Airlines

MILLIONS

of Fares

BILLIONS

of Combinations

Presented on behalf of Sabre Holdings, August 7, 2012 

SETTLEMENT

Tickets | Miscellaneous Charges

(Vendors or Direct)
BASE FARES

Public | Private | Fare Rules

ANCILLARIES

Public | Private | Fare Rules

INVENTORY

ANCILLARIES

Sabre TRAVEL MARKETPLACEEnabling transparency in an efficient travel marketplace—simplifying complexity

Sabre TRAVEL 

MARKETPLACE

SHOPPING 

SCHEDULES

Online | Interline | Codeshare

Public | Private | Fare Rules

Transactional (Or Not)

Frequent Flyer Tier Level

(ATPCO or Direct Filed)

(ARC & Global BSPs or Direct)

SHOP

BOOK

PRICE

FULFILL

SETTLE

SERVICE

SHOPPING 

ENGINE

HUNDREDS

of Airlines

MILLIONS

of Fares

BILLIONS

of Combinations

Presented on behalf of Sabre Holdings, August 7, 2012 

SETTLEMENT

Tickets | Miscellaneous Charges

ANCILLARIES

Electronic Miscellaneous Document

(Vendors or Direct)
IATA’s Claims

and New Distribution Capability Prop

The reality and impact to consumers

Presented on behalf of Sabre Holdings, August 7, 2012 
FALSE CLAIMS USED AS DIVERSIONARY TACTICS

Propagated by IATA and some airlines

About GDSs:Old Technology / High PriceCannot Handle AncillariesAbout Airlines:Airline Websites Have TransparencyNew Distribution Capability Solves the IssueAbout DOT: No Need to Regulate Ancillaries

Presented on behalf of Sabre Holdings, August 7, 2012 
IT’S NOT ABOUT COSTS—IN THEIR OWN WORDS

Airlines publicly confirmed in their analyst calls in 2006 Sabre contracts are good dea

“We do have savings—we will have savings from that agreement. It’s an agreement that we are happy with. We think it’s good for our customers. We think it’s good for us financially,and it secures a distribution channel that a lot of our best customers want

“Reducing our distribution is another important initiayear. And I’m pleased to rethe third quarter we succerenegotiated our agreemeGalileo and Sabre. I won’t get into the detailsagreements provide the op

that a lot of our best customers wantto use ...” Scott KirbyExecutive Vice President, Sales and Marketing US Airways

agreements provide the op

for us to realize significant 

distribution costs savings ...Gerard ArpeyFormer Chief Executive Officer AMR (American Airlines)

Presented on behalf of Sabre Holdings, August 7, 2012 
FALSE CLAIMS USED AS DIVERSIONARY TACTICS

Propagated by IATA and some airlines

About GDSs:Old Technology / High PriceCannot Handle AncillariesAbout Airlines:Airline Websites Have TransparencyNew Distribution Capability Solves the IssueAbout DOT: No Need to Regulate Ancillaries

Presented on behalf of Sabre Holdings, August 7, 2012 
Call to Action

Consumer protections are needed to ensure trav

can both compare the full cost of air travel and buy e

services wherever airlines sell their tickets

Presented on behalf of Sabre Holdings, August 7, 2012 
CONSUMERS ARE DEMANDING THEIR RIGHT TO TRANSP

Wherever airlines choose to sell their tickets

“No matter what channel you choose to 

book your flight, you should have immediate access to ALL fees, so you can calculate the total bottom-line cost of your fare ... Whether you book your 

flight online, over the phone, through a 

travel agency, or at a ticket counter, you 

have a right to know what the final tally 

“... GBTA fully supports the freright of businesses to create atheir own chosen business moincluding charging ancillary fetravel professionals must be pwith an accurate view of the f

products. To that end, it is imp

that there is full transparency on fares and fees. This also ap

have a right to know what the final tally will be.”Bill McGee, long-time consumer advocate and contributing editor for Consumer Reports, in an article on airlines’ added fees in USA Today, July 25, 2012

on fares and fees. This also apbooking, ticketing, billing, and those services. Above all, GBTa solution for its members. Ansolution must be guided by ththat airlines should provide codata anywhere they plan to dtheir product.”Michael McCormick, Head of tBusiness Travel Association, thorganization that represents tof corporate purchasers world23, 2012

Presented on behalf of Sabre Holdings, August 7, 2012 
CONSUMERS ARE DEMANDING THEIR RIGHT TO TRANSP

Wherever airlines choose to sell their tickets

“... we urge you to use your ongoing Notice of Proposed Rule Making (NPRM) process to require airlines to make all of their ancillary fee information easily accessible not only on their own websites but also through online and offline travel agencies via 

major reservations systems that power those ticketing systems

60,000 concerned citizens in a petition to DOT decrying the lack ancillary fee transparency, September 2010

Presented on behalf of Sabre Holdings, August 7, 2012 
WHERE CONSUMER PROTECTIONS ARE NEEDED & NOT N

Consumer rights and competitive marketplace dynamics 

Competitive marketplace dregulation not warranted 

GDS participationCommercial terms for dTechnology solution for 

Consumer rights—regulation warranted

Transparency of total price including essential ancillariesCompare and buy wherever airlines sell tickets

Non-essential ancillaries

DOT regulatory nudges have proven to protect and benefit consumers

Tarmac DelaysBaggage Fees

Taxes and FeesFuel Surcharges

Presented on behalf of Sabre Holdings, August 7, 2012
BENEFITS OF MAKING ANCILLARIES AVAILABLE

WHEREVER AIRLINES SELL TICKETS

A win-win-win for consumers, agencies, and airlines

AIRLINEHOTELCAR

TRAVEL SELLERS TRAV

Sabre

TRAVEL

350,000 

Tens of million

Consumers have transparency intothe total cost of trand can make info

Airlines generate 

more ancillary 

revenue by 

broadly and rapidly 

CARCRUISERAILTOUR

TRAVEL

MARKETPLACE

Go

AT-HO

Tens o

and can make infopurchase decision

Agencies can efficiserve travelers on behalf of airlines

broadly and rapidly 

deploying ancillaries

Presented on behalf of Sabre Holdings, August 7, 2012