BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C.

__________________________ 

) 

In The Matter of ) 

) 

Agreement Adopted by the ) 

Passenger Services Conference ) Docket No. OST-2013-0048 

of the International Air ) 

Transport Association as ) 

Resolution 787 ) 

__________________________ ) 

ANSWER OF THE AMERICAN SOCIETY OF TRAVEL AGENTS 

TO APPLICATION FOR APPROVAL OF IATA RESOLUTION 787 

Communications with respect to this document should be sent to:

Paul M. Ruden, Esquire 

Senior Vice President 

Legal & Industry Affairs 

American Society of Travel Agents, Inc. 

1101 King Street, Suite 200 

Alexandria, Virginia 22314 

Tel. (703) 739-6854 

Fax (703) 684-9185 

pruden@asta.org

May 1, 2013 
- 2 - 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C.

__________________________ 

) 

In The Matter of ) 

) 

Agreement Adopted by the ) 

Passenger Services Conference ) Docket No. OST-2013-0048 

of the International Air ) 

Transport Association as ) 

Resolution 787 ) 

__________________________ ) 

ANSWER OF THE AMERICAN SOCIETY OF TRAVEL AGENTS 

TO APPLICATION FOR APPROVAL OF IATA RESOLUTION 787 

The American Society of Travel Agents, Inc.1 hereby answers the application by the 

International Air Transport Association (“IATA”) for approval under 49 USC Section 41309 of 

Resolution 787 (“Application”). ASTA is filing this separate answer to supplement the answer 

filed by Open Allies for Airfare Transparency, of which ASTA is a member and to whose 

answer we fully subscribe. 

I. INTRODUCTION 

ASTA’s position is not that there are no circumstances under which a true technology 

standard created by IATA could be approved. But the application now before the Department, 

and the limited information adduced to support it, have not come close to passing the threshold 

 

1

ASTA is the world’s largest association of professional travel agencies. Its membership includes travel agency 

companies of the traditional, on-line and hybrid varieties, as well as individual travel agents and many others 

engaged in aspects of retail and wholesale distribution of transportation services. 
- 3 - 

imposed by rigorous application of the “public interest” standard that is the governing decisional 

criterion (a point on which we agree with IATA). 

The primary public interest issue concerns IATA’s efforts to develop a system that seems 

designed to raise airfares, although serious data privacy concerns associated with the “New 

Distribution Capability” (“NDC”) must also be addressed. The documentation prepared by IATA 

concerning Resolution 787 and NDC gives the appearance of an unprecedented agreement 

among horizontal airline competitors on a new business model for the pricing and selling of 

airline tickets. NDC also appears to have been designed for the purpose of defeating the fare 

transparency that the airlines and IATA have publicly confirmed has constrained their ability to 

raise the prices consumers pay. Further, Resolution 787 raises a number of consumer privacy 

concerns arising from the intrusive personal information whose production, prior to flight search, 

is contemplated by NDC. Since both of these issues are presented in Open Allies for Airfare 

Transparency’s filing, to whose answer we fully subscribe, we refer the Department to its filing. 

Beyond the consumer issues, we feel it is important to set the record straight on IATA’s 

claim of industry collaboration. Despite all the contrary rhetoric, the global airline industry chose 

a non-collaborative process on which to proceed in conceiving and developing NDC, which is 

the core fabric of Resolution 787. IATA spawned the NDC working initially and for many 

months in its inner chamber under a governance process led by “marketing executives from 11 

airlines.”2

 IATA then restricted participation in the development process by excluding interested 

parties who, like ASTA, wanted to learn more about the process before forming a final judgment. 

When pressed by the Open Allies coalition to disclose documents from NDC’s inception, 

 

2

 Application at 15. 
- 4 - 

documents that would have revealed the real purposes of and expectations for NDC, IATA 

resisted. 

There can be no plausible denial, as Open Allies’ answer details, that IATA’s approach to 

creating and presenting “authenticated shopping” has led to many internally contradictory 

statements about the purposes and likely effects of NDC. This has led to opposition around the 

world from consumer protection organizations and industry associations with expertise about the 

potential effects of a global agreement on what appears to be a single business standard for 

distribution of air travel. IATA’s approach to NDC has left so many unanswered questions that 

responsible parties have had no choice but to oppose the application. 

II. ASTA AND ITS MEMBERS SUPPORT INNOVATION AND CHANGE IN 

THE RETAIL TRAVEL SECTOR. 

We begin by disposing of one of the mythologies surrounding the present state of the 

travel agency industry and its relationship to innovation and change. In a world driven by rapid 

technological progress it has become commonplace in many quarters to denigrate firms that 

occupied central roles in the “pre-revolution” economy as “vested in the past” and “clinging to 

existing ways.” While there is little doubt that many U.S. travel agencies confronted with new 

forms of competition from well-funded Internet-based firms have left the industry, it is also a 

fact that many remain – and they do a robust business by continuing to deliver needed expertise 

and advice to millions of travelers every year, using a combination of new and old technologies. 

As of yearend 2012, there were close to 8,000 travel agency firms in business, who, in 143 

million transactions, sold $74.8 billion in air transportation. Those are big numbers. 

Travel agencies today exhibit a mix of business models, serve larger geographical 

markets than ever before (enabled by Internet communications), are intensely competitive and, 

for the most part, are quite successful despite continuing low margins. Popular myths 
- 5 - 

notwithstanding, most agencies do not depend on incentive payments from Global Distribution 

Systems (GDSs) and are not “wedded” to one way of doing business. If they had been, there 

would be far fewer of them surviving the waves of challenges that have occurred since 

commission caps in 1995 – including the total collapse of travel after the Sept. 11 attacks, the 

2009 global economic collapse, the 2010 volcanic ash cloud and many others. 

The essential fact on incentives is that 79 percent of agencies earn net GDS incentives 

(incentives deducted from fees owed) in a range from plus $5,000 a year to minus $2,500 per 

year. Further, among agencies that considered non-renewal of their GDS contract in 2012 but 

finally renewed, the primary motivators were: ease/speed of booking, no viable alternatives, 

better selection of travel options and better for corporate travel. The option “GDS segment 

incentives still significant” came in fifth place.3

 These findings belie any notion that agencies 

are slaves to GDS incentives. 

Travel agents that have survived well into the 21st century understand that their ability to 

continue doing business requires that they keep pace with technology, if for no other reason, and 

there are many, because their clients are adopting new technologies at a rapid rate. If an agency 

business cannot keep up, it will likely be destroyed and certainly will be marginalized. To 

borrow an apt phrase from science fiction, resistance is futile. 

At the same time, travel agencies are attracted to what is known to actually work in the 

efficient delivery of services to their clients. This is so because while change is occurring, 

business must still be conducted. Consumer expectations and needs for travel information and 

service must be met. The repeated dysfunction of airlines in mergers trying to combine their 

 

3

 Data from ASTA 2012 GDS Survey, Slides 46 49.
- 6 - 

reservations and other management systems is an object lesson for anyone who thinks that 

change is just unplugging one device in favor of another. 

An insightful article published last fall,4

 based on ASTA’s 2012 GDS survey, sets out a 

number of related and salient points: 

(1) “the number of agencies using a GDS continues to shrink” 

(2) “Any good, strong GDS agent can sit side by side next to anyone who does GUI 

point-and-click [booking] and just wipe them out,”5

(3) “Joe McClure, president of Montrose Travel, a $135 million agency ... said the most 

important attribute of the GDSs is their role as industry aggregators.... McClure said 

the GDS was essential for comparison shopping, and ... being able to shop multiple 

airlines and hotels enables the agent to offer real value to a customer.” 

(4) “When [Heather] Dolstra’s6

customers call her to book air, she said it’s because 

Amadeus gives her a selection of choices in a fraction of the amount of time it takes 

her clients to do it online.” 

The Department should therefore view with deep skepticism claims that travel agencies 

are not willing to change, are tethered to their GDSs for inappropriate reasons and are per se

opposed to innovations. IATA comes before the Department with a “plan” for massive change in 

air travel distribution that will, one way or another, affect every retail and wholesale seller of that 

travel as well as every person engaged in those businesses. These effects are significant because 

they in turn will impact millions of consumer of air travel, consumers whose interests are the 

primary concern of the Department in determining the public interest. 

The burden of justification is on IATA as the proponent of the Application to establish 

clearly that this unprecedented intrusion into the market by the global airline industry acting 

essentially as a single firm is in the public interest. IATA should be required to respond to all of 

 

4

 “GDS is still the ticket for most agencies,” Kate Rice, November 12, 2012, at 

http://www.travelweekly.com/print.aspx?id=243687. 

5

 Quoting Susan Garza, assistant vice president of operations for the host agency Uniglobe Travel Center.5.

6

 Democracy Travel in Washington, DC 
- 7 - 

the many questions being raised about the project to show not what might happen, but to prove to 

reasonable minds that the benefits claimed are at least highly probable. IATA bears the burden of 

proving NDC is true innovation and not a scheme to undermine fare and fee transparency at the 

expense of the traveling public. In thinking about this, the Department should bear in mind the 

observation of Jeremy Wertheimer of Google, which has participated in the NDC development 

meetings: 

“We send people, but they walk in and the decisions have been made and the 

performance is dead on arrival. 

“To make technical decisions you need more than just airline distribution heads.”7

III. THE COLLABORATIVE PROCESS CLAIMED BY IATA IS A FICTION. 

Since IATA has made so much of its asserted collaboration with all stakeholders in the 

industry,8 including a representation that it worked with “travel agents and their associations,”9

including ASTA, we must explain to the Department what actually occurred. 

Reports of IATA’s work on a new set of standards related to distribution communications 

surfaced in March 2012,10 implying conflict between IATA and other industry standards bodies 

also controlled by airlines. Hearing nothing from IATA, ASTA initiated contact regarding NDC 

on June 25, 2012 in a letter from ASTA’s Chief Executive Officer. The letter was a “request for 

more information” about NDC and “as expressed in your Global Media Day presentation that 

indicated IATA is “involving the entire distribution stakeholder supply chain,” including travel 

 

7

 http://www.tnooz.com/2013/04/15/news/google-chimes-in-on-airline-distribution-changes-criticises-closed-shopand-speed-issues/?utm_source=Tnooz+Mailing+List&utm_medium=email&utm_campaign=8fce52cac3-

RSS_EMAIL_CAMPAIGN 

8

 Application at 14-17. 

9

 Application at 16. 

10 The Beat, March 21, 2012. 
- 8 - 

agents, I ask that you include ASTA on any committee assigned to develop new standards.”11

The letter also noted – 

“As the association representing the travel agencies that sell the majority of air travel in 

the U.S., ASTA has a substantial interest in IATA’s initiative to set new standards.” 

Unaware that an IATA development meeting had been held in Geneva on July 13, ASTA, 

on August 10, reiterated the call for “participation throughout the process.”12 ASTA also asked to 

receive the working papers for the development meeting that we did know about, to be held in 

Montreal on November 27, 2012, and also to “send a small staff delegation to the meeting and 

any future meetings on this subject.” 

IATA’s response this time was a clear opening of the door into the development process, 

in an email said IATA was “very pleased to engage ASTA in development of the NDC 

capability.”13 ASTA responded by inviting IATA to participate in a session on NDC at its annual 

meeting in Los Angeles. IATA sent a representative who addressed an overflow crowd and 

answered questions, later thanking ASTA for “great feedback.” 14 Yet on September 25, 2012, 

IATA rescinded its offer for ASTA to attend the Montreal meeting. 

 Jumping ahead, and sparing the Department further details of the back-and-forth, there 

have been a stream of public relations statements from IATA claiming that it is in fact fully 

collaborating with industry associations, including ASTA specifically. This quite simply has not 

happened. Whatever may occur in the future, the record is clear that there has been no 

meaningful collaboration with the retail distribution system to date. The Department should not 

 

11 Letter dated June 25, 2012 from Tony Gonchar, ASTA CEO to IATA. 

12 Email, August 10, 2012, from Paul M. Ruden, ASTA Senior Vice President, Legal & Industry Affairs, to IATA. 

13 Letter dated August 13, 2012 from IATA to Paul M. Ruden. 

14 Email from IATA to Paul Ruden, September 10, 2012.
- 9 - 

accept any suggestion or implication that Resolution 787 bears the handprints and consent of the 

retail travel sector. 

IV. WHAT REAL COLLABORATION WOULD LOOK LIKE. 

If IATA had been serious about full collaboration with the distribution system about 

NDC, it would have engaged associations like ASTA at the outset of discussions of the concept 

of NDC. Association representatives would have been invited to the development meetings as 

well, not to the exclusion of others but in addition to individual agency firms that might be 

willing and able to attend the meetings held around the world. IATA would have set out the 

purposes of NDC and shown how the various elements relate to that purpose. And, of course, to 

the extent there were concept documents or working papers related to the idea, they would have 

been shared soon after creation. After-the-fact claims that NDC’s primary purpose is to give 

travel agents access to ancillary fees should not be credited when there is superior, but withheld, 

evidence available as to the purpose. 

Instead, IATA has operated mostly out of radar range for most interested parties. It is true 

that a couple of agencies were present, but in no sense can they be said to represent the industry 

or necessarily have an industry overview and perspective on the program. ASTA’s expertise 

would have been additive to that brought to the table by individual agencies. And, as noted 

earlier, those few who have been admitted to the inner sanctum have come away with the feeling 

that their input really didn’t matter. 

The inaccurate claims of full and open collaboration by IATA, when matched against the 

reality, have served only to exacerbate the skepticism of those, like ASTA, viewing NDC 

development from out in the hall. The seal was put on the conflict when IATA refused to release 

documents related to the non-public period prior to presentation of Resolution 787 in Abu Dhabi 
- 10 - 

in October, 2012, as called for by the Open Allies Coalition. The problem here is, therefore, of 

IATA’s own making. 

IATA has the burden of proof here, especially with regard to satisfying the “public 

interest” standard that is the governing decisional criterion. As detailed in the parallel comments 

of the Open Allies Coalition, serious consumer pricing and data privacy concerns remain 

unanswered. Further, the mass of contradictory documents and conflicting public statements 

surrounding NDC should lead to the withdrawal of the instant application, return to the 

proverbial drawing board for a process of real industry collaboration and a restart on a resolution 

that truly represents a technical standard. Absent such steps, the Department should disapprove 

the Application in its entirety. 

Respectively submitted, 

Paul M. Ruden 

Senior Vice President 

Legal & Industry Affairs 

 
- 11 - 

CERTIFICATE OF SERVICE 

I hereby certify that I have this 1st day of May, 2013, served, by electronic transmission, a copy 

of the foregoing Answer of the American Society of Travel Agents upon counsel for the 

International Air Transport Association as set forth below: 

Douglas Lavin Bert W. Rein 

Regional Vice President – North America Bruce L. McDonald 

International Air Transport Association Wiley Rein LLP 

1201 F Street, NW, Suite 650 1776 K Street, NW 

Washington, D.C. 20004 Washington, DC 20006 

(202) 628-9292 202-719-7000 

 

 ___________________________________ 

 Paul M. Ruden