Outline of Statement: Arthur B. Sackler Executive Director Open Allies for Airfare Transparency Advisory Committee for Aviation Consumer Protection

June 28, 2012 Open Allies is here today because we believe fairne ss demands that consumers must be enabled to see, compare and buy all-in airfares at any outlet with which an airline does business. • To do that, must jumpstart a market that isn’t work ing because data on fees is not being made available • Don’t just take our word for it: look to GAO, whic h titled a 2010 report in part: “Consumers Could Benefit from Better Information ab out Airline-Imposed Fees” • Look to the FTC, with jurisdiction over unfair and deceptive practices that parallels DOT’s on air travel, which says that: “withhold[in g] or fail[ing] to generate critical price . . . data...leav[es] buyers with insufficient information for informed comparisons.. . [which]undermines an essential prec ondition to a free and informed consumer transaction, and, in turn, to a well-funct ioning market.” • Look to DOT itself – where disclosure has been so c entral to its truth-in-advertising regulations; • Or, most viscerally, to consumers themselves – more than 60,000 of whom in less than a month signed a petition to the Secretary urg ing full disclosure of fees. Open Allies represents nearly 400 independent trave l distributors, and works closely w consumer orgs • Travel agents, OTAs, corporate travel managers, TMC s (travel agents for big corps), GDSs (organizers and conduits of fare data from air lines to agents), and more • Several of the organizations speaking today are mem bers of Open Allies • More than 50% of all airline tickets are sold throu gh the independent channel Open Allies appreciates the opp to appear today • Members were pleased Congress directed the formatio n of this advisory comm • DOT has been doing a good job on consumer issues, b ut expert advice can’t help but help • Perhaps the overriding issue for air travel consume rs: airline ancillary fees Our members are united in the view that full disclo sure is key to resolving the controversy surrounding feesOpen Allies Summary, p2

• Full disclosure means transparency, transactability , and dynamic presentation of fees • Should apply, at least, to “core” fees – those unbu ndled from traditional airline fares, such as baggage or seating • Enabling consumers to compare, on their selected it ineraries, all-in prices, applesto-apples, across airlines, at all sales outlets wh ere airlines choose to do bus • This is no simple b2b squabble; this is about vindi cating the interests of consumers o Not about GDS/Airline negotiations o It’s about ensuring consumers have all the info the y need to make informed choices; that they are not disadvantaged by airline s withholding data • Open Allies takes no position on fees themselves, b ut once fees are charged, they must be fully disclosed o It’s a new world: fees appear here to stay o We ask only that business and leisure air travelers not be kept in the dark Failure to fully disclose is “unfair” to consumers • As a matter of common sense, traditional expectatio ns in commerce, and avoiding unpleasant experiences at airports o Accustomed to comparison shopping for air travel fo r decades

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 Still one of, if not the, largest segment of e-comm erce  W that track record, shdn’t be going backwards o Unpleasantness not just in unexpected additional fe es, but in seating and preboarding of families with small children, and ot hers • In the legal sense under DOT jurisdiction – Paralle l to FTC Section 5 o In the end, the FTC unfairness policy targets outco mes – intentional or inadvertent -- that “may prevent consumers from eff ectively making their own decisions” o The current DOT rule is a solid first step toward f ull disclosure, but more needs to be done, as the Department recognizes. “Consumers” means more than individual air traveler s and families • Full disclosure is vital to businesses, too o As you heard from Kevin Mitchell, corporate travel departments and TMCs must have it to budget for and track travel spend o Travel agents, OTAs and others need it in order to meet consumers’ needs Why full disclosure is vital to protecting consumer s • Prerequisite for true comparison shopping • Transparency is necessary, but not sufficient, to e stablish comparison shopping • Transactability is essential: consumers must be ab le to purchase what they see, and independent sellers must be able to sell it to them • Dynamic presentation ensures all fee information is current. Static presentation on airline sites presented in ranges and changed once a quarter offers not only no precise information on fees, but no information at all on availabilityOpen Allies Summary, p3

• Saves on search time which DOT values at $42/hr; mu ltiplied over the universe of consumers searching for air travel, that number is huge • Spurs competitive pricing Technology for independent distribution of fully di sclosed fees is available and in use • Effective software protocols developed among indust ries, including the carriers, through ATPCO, and fully tested by more than two do zen airlines, are in use • GDS technology is state-of-the-art, using 21 st Century mainframes and server technology, and already is handling detailed fee in formation for a number of airlines, including airline customization of servic es to individual consumers. It’s not your father’s GDS. Joe Rubin will address this iss ue in some depth. What Open Allies does not want: • To force airlines to do business with any entity wi th which they do not choose to do bus • To force airlines to share fee information with any entity with which they are not doing business Unbundling – with full disclosure – has benefits fo r all • Needed additional revenue stream for airlines -- $3 2B/$15B/2011 • Comparison shopping for consumers • Passengers pay only for services being used, and at competitive prices • Innovation will enhance marketing, revenues and job s Open Allies believes the best way DOT can protect c onsumers is to compel full disclosure in Consumer Rulemaking III • No airline wants to look more expensive than its co mpetitors • There are marketing advantages to opacity • Airlines have ignored the voices of consumers, incl uding the 60,000 who signed the petition to DOT, media reports, Members of Congress , and their best business partners and customers, and have declined to provid e full disclosure voluntarily Conclusion: Consumers must be enabled to see, comp are and buy fares and fees. The only way that will happen is if the market works. And the only way the market will work is if DOT gives it a push and jumpstarts it, which is wha t we urge your advice to the Department to be.