Cornish F. Hitchcock

ATTORNEY AT LAW

5614 CONNECTICUT AVENUE, NW • NO. 304

WASHINGTON, D.C. 20015-2604

(202) 489-4813 • FAX: (202) 315-3552

CONH@HITCHLAW.COM

1 May 2013

Office of the Secretary of Transportation

1200 New Jersey Avenue, S.E.

Washington, D.C. 20590

Re: Docket No. OST-2013-0048 (IATA Resolution 787)

Ladies and Gentlemen:

I am filing these comments in support of the application of the International

Air Transport Association (“IATA”) for approval of Resolution 787, the New Distribution Capability (“NDC”) proposal that would set an XML standard for distribution of information about fare and service options. 

I am filing these comments as an individual air traveler. By way of back- 1

ground, I served as attorney, director and legal director of the Aviation Consumer

Action Project (“ACAP”), a non-profit consumer group from 1977 until the early

1990s, and in those capacities I drafted comments, articles and congressional

testimony on a range of aviation issues, including anti-competitive practices in

airline-owned computer reservation systems (now called “global distribution

systems” or “GDSs”). In 2000 I was asked to serve as chairman of a new Consumer

Advisory Board created by Orbitz, the first fully server-based internet travel

website, and I did so for five years through Orbitz’s beta period, launch and emergence as a leading travel site. I joined Orbitz because it was committed to implementing a policy goal I had long advocated, namely, a neutral and unbiased display

of air travel options from a number of carriers. Orbitz succeeded in doing so with

its trailbreaking “matrix” that displayed a wider range of carriers and their

offerings in response to a consumer search. The matrix was similarly introduced for

other travel services, notably hotel and rental car options.

I support approval of this application because it would set the stage for

implementation of improved displays of fare and service options for passengers. For

better or worse, airlines have over the past years “unbundled” a number of services

I am receiving no compensation for filing these comments, I have no expectation of

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receiving compensation, and I do not have any clients who have an interest, either direct or

indirect, in this matter. 
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and now offer a menu of different service offerings, e.g., more legroom, onboard wifi, onboard meals. This evolution means that passengers can more go beyond

asking “Who’s got the lowest fare?” to asking “What kind of service can I get for my

money?” – and that is all to the good.

Unfortunately, the only way for passengers to learn of these options at

present is by going to individual airline websites. Comparison shopping is thus

time-consuming if one wants to find the full range of options on various carriers.

And that’s where the NDC comes in. NDC would set a standard that allows

airlines to communicate their fare and service offerings to third parties, such as

online travel agents and website, which can aggregate data from a number of

carriers and give consumers a wider sense of what options are out there. The

technology is there, because NDC is being jointly proposed by IATA airlines,

regulatory approval is needed.

And should be granted. Notwithstanding the obvious consumer benefits of

enhanced disclosure, GDSs, travel agents and their allies are banging the drum

against NDC, claiming that it would be anti-competitive and bad for travel agents,

would usher in an era of “secret airfares” and would invade passenger privacy. 

We’ve seen this movie before. When Orbitz was announced, the same groups

denounced it as a clear-cut antitrust violation because the initial founders were five

airlines. The campaign succeeded in revving up congressional hearings, an antitrust investigation and regulatory scrutiny. At the end of the day, and the passage

of several years, every government agency concluded that Orbitz should be able to -

operate as planned and that there were no anti-competitive aspects of Orbitz’

business plan that needed changing.

The intellectual argument against Orbitz rarely rose above the level of

“Orbitz is something that five big airlines want. What else do you need to know to

oppose it?” To some, that was a seductive siren song and helped fuel opposition, not

all of which was well-informed. Now we hear the same siren song from many of the

same parties that led the charge against Orbitz. They were wrong before, and they

are wrong now. GDSs and travel agents may have their own parochial reasons to

oppose NDC, but the proposed standard cannot seriously be viewed as anti-passenger. NDC simply reflects an effort to facilitate the ability of airlines to better

inform consumers of their choices, thus taking the first generation of online travel

agency services to the next level. The arguments against NDC are easily answered:

1. NDC will lead to collusion and jack up prices for many travelers. Not so. 

Each airline will have to decide for itself if NDC is appropriate for its offerings and

which fares or services to offer. In this respect, NDC is functionally similar to the

current system. How this leads to price gouging is never satisfactorily explained.
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2. NDC will produce secret airfares that many passengers will not be able to

obtain, and that’s unfair. That’s also the way the current system works unless one

undertakes significant efforts to comparison shop between sites. The ability to

customize service offerings is hardly new or revolutionary, and there is no reason

for air travelers to have that option artificially restricted to protect intermediaries. 

Also, the practice of online customizing is widely accepted elsewhere. For example,

if one wants to buy a laptop computer online, one scrolls through the pages and

determines how much memory to purchase, how large a screen one wants, whether

to add a camera, etc. The final price becomes apparent once the consumer has

finished the exercise. The arrived-at price is hardly a “secret” from anyone. 

Instead, that price is something that the individual constructs according to his or

her preferences. The final price may not be uniform for all customers, but that is

the situation in the airline industry today, where there are price differentials

depending on how many bags one checks, how much legroom one wants, what kind

of meal one wants to order, or whether one wants wi-fi connectivity in flight.

3. Personal privacy will be invaded. It is tempting to cast this charge as a

red herring, but it is more in the nature of a crimson whale. NDC will not require

passengers to provide more information than they do today, although they may

choose to provide more data in order to obtain additional offerings, and any airline

and any intermediary would have an obligation to protect privacy. Differently put,

if a passenger is willing to provide information and to “log in” to a site in order to

obtain more choices, he or she should be free to do so. This approach is widely

accepted by Internet users and has been for years.

In closing, NDC has the potential to improve the passenger’s ability to learn

of and purchase personalized fare/service options, depending on how it is adopted

and used by airlines and intermediaries. Rather than let this system evolve, NDC’s 

opponents (who would prefer that options such as Orbitz never existed) are asking

the Department to block NDC and to protect mainframe-based distribution systems

that may have been cutting edge 20 years ago, when Mark Zuckerberg was still in

grade school and when there was no Amazon, eBay, Facebook, Google, Yahoo! or

many of the other Internet sites that have gained popular acceptance over the past

two decades. Times change, and NDC offers the potential to let consumers have the

same options for purchasing air travel that they have in other areas. I thus urge 

approval of this proposal.

Thank you for the opportunity to submit these comments. Please do not

hesitate to contact me if there is additional information that I can provide.

Sincerely yours,

/s/

Cornish F. Hitchcock