Asociación Latinoamericana y del Caribe de Transporte Aéreo | Latin American and Caribbean Air Transport Association

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6355 NW 36 Street, Suite 601 | Miami, Florida 33166 – USA | Tel. +1 786 388 0222 - Fax +1 786 522 7315 | www.alta.aero

United States Department of Transportation

1200 New Jersey Avenue, S.E.

Washington, D.C. 20590

RE: DOT-OST-2013-0048-0001

To Whom It May Concern,

I am writing on behalf of the Latin American and Caribbean Airline Association (ALTA) in support of an 

“Application For Approval of An Agreement (Resolution 787) by the International Air Transport 

Association” (hereinafter “Resolution 787”).

ALTA strongly supports the right of the global industry to develop a new data transmission standard that 

will enable a more efficient and effective indirect distribution of airline products and services. As noted 

in the IATA filing, Resolution 787 is focused solely on updating a long used but out of date data 

transmission standard to better meet the needs of today’s airlines, the distributors, and, most 

importantly, the end customer. The development of this standard will require the active participation of 

all parties that either today distribute airline products and services or seek to do so in the future. This 

standard will enable competition at the airline and distributor level and advance the interest of the 

general public. We urge DOT to promptly approve this application and encourage the industry to work 

together to support the development of this new data transmission standard.

The original airline distribution network was developed over 40 years ago. It remained as originally 

designed until such time as the Internet and data processing capabilities enabled airlines to present 

offers directly to their customers without reliance on third parties or a cumbersome and limited fare and 

availability filing system. Over the last several years, the industry has moved to one dominated by the 

original proprietary network to one where customers are increasingly purchasing their tickets and 

ancillary services directly from airline websites or through travel agents via a direct connect system. 

Most recently, the GDSs are entering this new direct connect market, as can be seen by the recent 

partnerships between Travelport and American Airlines and Air Canada respectively. Resolution 787 is 

designed to support what is already happening in the market by standardizing the data connection 

between airlines, aggregators (like the GDSs) and travel agents. This will reduce the cost associated with 

developing these connections and facilitate the delivery of the type of content via the indirect channel 

that customers have come to expect when going directly to the airline websites. This standardization 

supports a more efficient air transport system and should be embraced by DOT.
Asociación Latinoamericana y del Caribe de Transporte Aéreo | Latin American and Caribbean Air Transport Association

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6355 NW 36 Street, Suite 601 | Miami, Florida 33166 – USA | Tel. +1 786 388 0222 - Fax +1 786 522 7315 | www.alta.aero

As in any market evolution, there are incumbents that are fearful the new way of doing business will 

threaten their market position in the old model. In this case, critics challenged Resolution 787 as 

anticompetitive and anti-consumer. It is worth comparing the allegations to the facts:

Privacy

It was argued that Section 3.1.1.1.2 of Resolution 787 reflects the intention of airlines to require 

passengers to give up their right to privacy in order to receive an offer going forward. This argument 

shows either a lack of understanding of data transmission standards or a decision to mislead DOT and 

the public as to the intent of this section. Resolution 787 calls for the establishment of a new XML based 

data transmission standard to replace the outdated EDIFACT standard. When developing a data 

transmission standard, the industry needs to accommodate all potential data elements that may be 

included in any transmission via the indirect channel anywhere in the world. Further, the goal is to 

develop this standard in a way that it can accommodate an ever changing marketplace over a long 

period of time. As such, Section 3.1.1.1.2 accommodates elements like nationality to support, for 

example, countries in which the local governments mandate that nationality be collected from the 

customer. It also accommodates customer type (adult/child), an element that is already collected today 

via the GDS network. Rather than evidencing airline intentions on what they are going to collect, the 

standard is designed to accommodate elements that either could or must be collected based on 

government and other mandates. As noted in the IATA application, these elements are not mandatory 

(the language is “data may include”). 

It was also mentioned that in an NDC environment, customers will not be able to secure anonymous 

offers from airlines like they do via the current GDS enabled agent network. The best place to determine 

what the airlines will and will not require in terms of passenger data before presenting the offer is the 

existing airline websites. Even a cursory review of the airline websites demonstrates that customers 

have the option of shopping the same way as via today’s indirect channel (almost anonymously – only 

need to identify their customer type). Nothing in Resolution 787 or NDC impacts what the airlines do via 

the indirect channel. Moreover, it is illogical to argue that airlines will withhold offers from any potential 

customer because of lack of data. Airlines are pursuing the NDC in the hope that they can offer more 

opportunities for customers to have seamless access to their products and services, not less.

Transparency

If the data transmission standard envisioned by Resolution 787 is adopted widely by the industry, it will 

enable airlines to know who is seeking an offer as it does today through the direct channel. Critics have 

suggested that moving the offer generation from the GDS to the airline will likely result in the airline 

taking advantage of the knowledge of the customer to the detriment of that customer. Again, this 
Asociación Latinoamericana y del Caribe de Transporte Aéreo | Latin American and Caribbean Air Transport Association

________________________________________________________________________________________________________________________

_

6355 NW 36 Street, Suite 601 | Miami, Florida 33166 – USA | Tel. +1 786 388 0222 - Fax +1 786 522 7315 | www.alta.aero

allegation suggests either a lack of understanding of the industry or a willful attempt to maintain the 

status quo at the expense of customers. Today, an increasing number of customers are buying tickets via 

airline websites because they are confident they are getting greater value through this channel. Airlines 

have the knowledge of the customer coming to their website. The challenge for customers is that the 

current market does not enable customers to seamlessly compare these complete airline website offers 

against other offers presented by other airline websites. In contrast, the XML standard called for in 

Resolution 787 will enable aggregators (today’s GDSs and new entrants) to seamlessly compare and 

contrast airline offers of all of their products and services. As such, if the airlines wanted to use the 

knowledge they have about their customers to present higher fares, they would not pursue this new 

data standard and instead leave customers the difficult task of comparing and contrasting both complex 

and very different airline offers. 

A second argument put forth by detractors is that the current filing system is the best guarantor of full 

price transparency for the consumer. However, while this was true when airline fares were all-in fares, 

this is no longer the case now that airlines have unbundled their fares to better meet the needs of their 

customers. Today, the GDS enabled agents are only able to present fare and frequency comparisons. 

Customers increasingly complain about unanticipated airline and other fees not presented via this 

indirect channel. Further, since the airline does not know who the customer is before the ticket is 

purchased, customers are unable to take advantage of special offers they could receive by identifying 

themselves through the direct channel. While the filing system allows for comparison of the base fare, it 

does not permit comparison of the full travel offer. The data transmission standard called for in 

Resolution 787 will allow third parties, including today’s GDSs to present these accurate side-by-side 

comparisons of full airline offers.

Challenge to Existing Business Model

Opponents to Resolution 787 suggested that airlines are pursuing NDC in order to reduce airline 

distribution costs by putting GDSs and agents out of business. Again, the facts tell a different story. 

Airlines freely acknowledge that one consideration when pursuing NDC was the need to reduce the 

costs of indirect airline distribution. Today airlines pay approximately $7 billion per year to the GDSs to 

construct and deliver offers to travel agents. Today, the Internet and data processing capabilities 

eliminate the business need to file fares and schedules and allow third parties to construct airline offers. 

Today’s direct distribution costs are a fraction of the fees paid by the airlines to the GDSs. Even more 

troubling, the GDS network serves to commoditize airline travel to the lowest possible fare rather than 

presenting the full array of products and services being offered by airlines as well as bundles of those 

products and services that are designed to meet the particular needs of individual customers. NDC is an 
Asociación Latinoamericana y del Caribe de Transporte Aéreo | Latin American and Caribbean Air Transport Association

________________________________________________________________________________________________________________________

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6355 NW 36 Street, Suite 601 | Miami, Florida 33166 – USA | Tel. +1 786 388 0222 - Fax +1 786 522 7315 | www.alta.aero

effort to both reduce airline indirect distribution costs and to better market their full menu of products 

and services.

However, seeking to reduce costs does not mean that airlines are seeking to eliminate the need for 

travel agents. In fact, the opposite is true. If the data transmission standard is widely adopted, we fully 

expect that agents and airlines will join in a richer, more mutually beneficial relationship than they have 

enjoyed in the current GDS enabled network. NDC will enable agents to get seamless access to 

significantly more airline content than they currently receive from the GDSs. Agents will therefore have 

the opportunity to increase their value to their travel customers by navigating the myriad of offers and 

options being presented by the airlines. The airlines will rely more on agents to navigate these offers 

and present them in a way that best meets the customers’ particular needs. 

Nor does NDC envision eliminating the need for GDSs. We anticipate that if this standard is widely 

adopted, airlines will slowly reduce the number of products and services they file with third parties. As 

such, the existing GDS role of constructing airline offers will diminish over time. However, GDSs will still 

be well positioned to serve as an aggregator of the various airline offers for presentation to travel 

agents.

In summary, ALTA firmly believes that Resolution 787 will stimulate competition, increase innovation 

and reduce costs in the airline tickets distribution sector by bringing value and benefits to the end 

customers. The modernization of services will eliminate competitive barriers thereby giving rise to 

system-wide economies that would result in a more competitive and efficient industry. Reductions in 

costs will make the Airline Industry more competitive and hence more attractive to new and existing 

customers.

Yours truly,

Alex de Gunten

Executive Director

Latin American and Caribbean Air Transport Association (ALTA)