CENTRA Technology, Inc. 

Record of Meeting August 2012 

Second Meeting of the 

Advisory Committee on 

Aviation Consumer 

Protection 

Prepared by CENTRA Technology, Inc. 

Arlington, Virginia 22203 

Program Manager: Kristen Best, 703-894-6953
CENTRA Technology, Inc. 1 

RECORD OF MEETING

Second Meeting of the Advisory Committee on Aviation Consumer Protection 

Meeting Date: August 7, 2012

Meeting Time: 9:00 a.m. to 5:00 p.m., Eastern Time 

Meeting Location: U.S. Department of Transportation, Conference Rooms 8, 9, and 10. 

1200 New Jersey Avenue SE, Washington, DC

Public Notice: The Office of the Secretary (OST), Department of Transportation (DOT) 

informed the public of the Advisory Committee meeting in a Federal Register notice published 

23 July 2012 (77 FR 43135). 

Attendees: 

Last Name First Name Affiliation 

Ale Flint Deborah Committee Member 

Berg David Committee Member 

Best Kristen CENTRA Technology, Inc. 

Bibbo Donna NovoNordisk 

Bishins Bruce Association of Retail Travel Agents (ARTA) 

Blackston Elizabeth Office of Illinois Attorney General 

Blaney Jim British Airways 

Brewer Monte Formerly Air Canada 

Carroll Julie National Council on Disability 

Corbett Jack AirlinePassengers.org 

Corbett Molly N/A 

Davidson Jim Farelogix 

DeMay Tom Travelport 

Doernhoefer Gary International Air Transport Association (IATA) 

Downey Shane Global Business Travel Association (GBTA) 

FitzPatrick Beth Eckert Seamans Cherin & Mellott, LLC 

Garner Cory American Airlines 

Gosain Carol N/A 

Grunewald Lyndsey N/A 

Gustafson John US Airways 

Harvey Heather Spirit Airlines, Inc. 

Heimlich John Airlines for America 

Higginbotham Patty Global Business Travel Association 

Hunter Christopher Advocacy Solutions LLC 

Jansen Bart USA TODAY 
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Kass Howard US Airways 

Kenney Peter Delta 

Kopf Curtis Alaska Airlines 

Kroeger Chris Sabre/ITSA 

Lenza Al Lenza Group 

Leocha Charles Committee Member 

Maddux Jason Garofalo Goerlich Hainbach PC 

Madigan Lisa Committee Member 

Mandarino Elizabeth World Travel, Inc. 

Markert Alissa United Airlines 

McElroy Deborah ACI-NA - Airports Council International 

Mitchell Kevin Business Travel Coalition 

Montalto Darla Major League Baseball 

Myers Monty Eureka Software Solutions, Inc. 

Parikh Ruchi Department of Justice 

Payne Jessica CENTRA Technology, Inc. 

Pinkerton Sharon Airlines for America 

Podberesky Samuel Department of Transportation (DOT) 

Reck Robin Interactive Travel Services Association (ITSA) 

Rivken Robert Department of Transportation (DOT) 

Rubin Burt AirlinePassengers.org 

Ruden Paul American Society of Travel Agents (ASTA)

Schwarte Dave Sabre/ITSA 

Semanchik David Air Line Pilots Association, International 

Shiotani Kenneth National Disability Rights Network (NDRN) 

Slocum Ben US Airways 

Stein Doug N/A 

Stokes Amanda CENTRA Technology, Inc. 

Tello Jim Law Offices of James W. Tello 

Terry Shelly Sabre 

Thumpston Jim Zuckert, Scoutt & Rasenberger 

Vande Beek Dirk Travelport 

 
CENTRA Technology, Inc. 3 

TABLE OF CONTENTS

Meeting Proceedings ....................................................................................................................... 4 

Welcome and Housekeeping Matters .......................................................................................... 4 

Introductory Remarks .................................................................................................................. 4 

Continuation of Presentation regarding Disability Rights Enforcement and Initiatives by Office 

of Aviation Enforcement and Proceedings.................................................................................. 4 

Perspectives on Disability Issues in Air Travel by Representatives of the Disability 

Community .................................................................................................................................. 9 

Tarmac Delay Rule and its Enforcement .................................................................................. 14 

Current Economic and Financial Conditions Facing Air Carriers ............................................ 17 

Demonstration of Airline On-line Air Travel Shopping Capabilities ....................................... 20 

Association of Retail Travel Agents (ARTA) Comment .......................................................... 23 

Afternoon Session ..................................................................................................................... 24 

GDS Issues – Air Carrier Perspective ....................................................................................... 24 

GDS Issues – Vendor Perspective ............................................................................................. 29 

Individual Airline Comments .................................................................................................... 33 

Committee Member Biographies .................................................................................................. 38 

 
CENTRA Technology, Inc. 4 

MEETING PROCEEDINGS

Welcome and Housekeeping Matters 

Samuel Podberesky, Department of Transportation (DOT), Assistant General Counsel for 

Aviation Enforcement and Proceedings 

Mr. Sam Podberesky, DOT, opened the meeting at 9:00 a.m. He welcomed the attendees to the 

second meeting of the Advisory Committee on Aviation Consumer Protection (ACACP) and 

thanked them for their attendance. Mr. Podberesky reviewed the agenda and noted that the 

Committee had time for questions throughout the day, but the agenda was especially full. He 

covered housekeeping matters with details on location of restrooms, procedures for evacuation, 

and escort requirements throughout the DOT building. 

Mr. Podberesky then turned the meeting over to The Honorable Lisa Madigan, Chairperson of 

the Committee. 

Introductory Remarks 

Lisa Madigan, Attorney General (AG), State of Illinois, Chairperson of the Committee 

Committee Chair AG Lisa Madigan welcomed the Committee and attendees. She reiterated Mr. 

Podberesky’s comment on the fullness of the agenda. AG Madigan made note of recent media 

coverage on the hassles of flying from the consumer perspective. She pointed out the relevancy 

and importance of the task which U.S. Congress has charged the Committee. 

AG Madigan then introduced the other three members of the Committee, Charles Leocha, 

Deborah Ale Flint, and David Berg. 

With no remarks by these three members, AG Madigan welcomed to the podium Ms. Kathleen 

Blank-Riether to continue her presentation which she had begun at the first meeting of the 

Committee on June 28th, 2012. 

Continuation of Presentation regarding Disability Rights Enforcement and Initiatives by 

Office of Aviation Enforcement and Proceedings 

Kathleen Blank-Riether, Senior Attorney, DOT Office of Aviation Enforcement and Proceedings 

Ms. Kathleen Blank-Riether began her presentation on civil rights statutes and regulations. She 

reviewed the fact that the Air Carrier Access Act (ACAA) focuses on the responsibility air 

carriers have to passengers with disabilities. When enacted in 1986, the ACAA required nondiscrimination only from U.S. carriers against a qualified individual. Congress amended the act 

in 2000 specifically to include foreign air carriers as well. 

Ms. Blank-Riether reviewed the definition of an individual with a disability as someone who has 

a permanent or temporary physical or mental impairment that substantially limits one or more 

life activities, someone who has a record of such impairment, or someone who is regarded as 
CENTRA Technology, Inc. 5 

having such an impairment. She specifically pointed out that the definition includes both 

temporary and permanent impairments. Ms. Blank-Riether commented that it was important to 

note that the regulation is quite detailed with a broad spectrum of inclusions; for this 

presentation, she would simply address the key provisions. Specifically, Ms. Blank-Riether 

broke out 14 Code of Federal Regulation (CFR) Part 382 and the subsets therein. 

Subpart C focuses on information. It specifies that airlines must provide information for 

passengers on the accessibility of the aircraft and services available on a particular flight. This 

includes, for example, the location of seats with movable armrests, or the availability of levelentry boarding. Telephone reservation and information services available to the public must be 

accessible to those with hearing impairments (text telephone). All of this information must be 

available at the airport to anyone who asks and must also be disclosed on the airlines’ websites. 

Any discounts or specials offered on an airline’s website must also be offered over the phone to 

passengers whose disabilities prevent use of the website. 

Subparts D and E focus on accessibility. Airlines must ensure the accessibility of the aircraft and 

airport facilities under the airlines’ control. Contracts and leases with airports must allocate these

responsibilities. This is more limited in foreign airports though it was noted that U.S. carriers 

who operate at foreign airports are still subject to these same regulations. Sections on cabin 

accessibility include provisions for accessible lavatories, priority stowage space for one folding 

wheelchair, and high-contrast captioning on all audio-visual displays played for safety and 

informational purposes both on the aircraft and in the terminal. 

For persons with hearing impairments, air carriers must provide access to the same information 

they provide to other passengers throughout the travel process. There is a joint responsibility for 

carriers and airports in ticketing areas, customer service desks, and at kiosks. Staff must provide 

assistance to passengers with disabilities who cannot readily use airport kiosks or allow them 

access to the front of the check-in line. 

Subparts G, H, and I focus on assistance. Airlines must provide assistance to passengers with 

disabilities, upon request, within the airport terminal, during enplaning, deplaning, connecting, 

and on the aircraft itself. This includes access to service animal relief area(s). Airlines must have 

written and signed agreements with airport operators. The airlines and airports are jointly and 

severally liable for implementing said agreements. Airlines may rely on assistance services 

provided at foreign airports. However, if that service does not meet Part 382 requirements, then 

the airline must supplement those. 

Committee member Leocha interjected a question at this point regarding the DOT’s capacity, 

outside of disability policies, to regulate airport operations that affect passengers. Ms. BlankRiether answered that the Federal Aviation Administration (FAA) has some capacity in this area. 

Mr. Podberesky also answered that, according to Section 504, any airport that receives funds 

from the DOT must meet all requirements outlined by the Americans with Disabilities Act. For 

example, Part 382 of the ACAA requires lifts to assist the disabled, so DOT funds only those 

airports with lifts. These are two sets of regulations that impose the same responsibility. 
CENTRA Technology, Inc. 6 

Committee member Leocha then restated his question on whether DOT regulates other specific 

areas regarding how an airport should operate. Mr. Podberesky further clarified that the FAA 

enforces safety standards at airports and revisited his comment on grants. DOT can stipulate how 

airlines should spend the money they receive from the Federal Government. Or, if an airport 

does not comply with regulations—for example, not allowing signage that the FAA requires—

grant assurance provisions can result in taking the grant away. 

Ms. Blank-Riether then continued with her presentation, revisiting Subpart I. Assistive devices 

must not be counted toward the limit of carry-on baggage and carriers must permit passengers to 

stow assistive devices in the aircraft cabin. Passengers who take advantage of preboarding may 

stow their manual wheelchair with priority over other items in the cabin. 

Airlines must give priority to wheelchairs for stowage in cargo areas in order to make them 

among the first items retrievable upon landing. Return of checked assistive devices must be 

prompt and the liability for damage to these devices does not fall under domestic baggage 

liability limits. The original purchase price of the device is the basis for liability calculation. 

Committee member Leocha asked for more information on a rulemaking currently ongoing, or 

perhaps proposed, to track damage to wheelchairs and assistive devices. Ms. Blank-Riether 

affirmed that this is part of a Notice of Proposed Rulemaking (NPRM) and DOT is currently 

evaluating whether wheelchair damage/delay should be tracked. The NPRM also proposes 

tracking the number of assistive devices transported in the cargo hold overall. 

Ms. Blank-Riether continued her discussion of Subpart I by stating that airlines must permit use 

of portable oxygen and electronic respiratory devices that are FAA-approved on flights. Carriers 

must provide certain information to passengers inquiring about medical oxygen when making 

reservations. 

Moving to Subpart H which focuses on assistance on the aircraft, Ms. Blank-Riether specified 

airlines must assist those with a disability in reaching aircraft seats, stowing and retrieving carryon items, use of on-board wheelchairs to move to and from the lavatory, and preparations to eat. 

Committee member Leocha noted to Ms. Blank-Riether that, in his experience, flight attendants 

seem to refuse to help in stowing and retrieving carry-on items overhead. He asked whether this 

relates to this rule. She responded that whether a passenger is elderly or disabled, anyone with a 

physical limitation can request help onboard and that flight attendants are obligated to help. If a 

passenger does not have a limitation, and, for example, does not feel like stowing his bag, this 

rule would not apply. 

Ms. Blank-Riether transitioned to discussing service animals next. Airlines must permit a service 

animal to accompany a passenger with a disability. This includes service animals trained to assist 

persons with disabilities or animals for emotional or psychiatric support. Airlines may require 

advanced notice for passengers traveling with emotional or psychiatric supports service animals 

including requiring medical documentation. Airlines are not required to accommodate certain 

unusual service animals such as snakes. Airlines can require that large animals be transported in 

the cargo hold. 
CENTRA Technology, Inc. 7 

Subpart J of Part 382 details training requirements. Airlines must provide appropriate training to 

all personnel that deal with the traveling public and ensure the same for their contractors. 

Employees must be proficient concerning the rules appropriate to their duties, maintain the safety 

and dignity of passengers with disabilities, and be aware of appropriate responses to different 

types of disabilities. Some examples of service to passengers with disabilities may include, 

reading information out loud to individuals with vision impairment and writing notes to 

communicate with passengers with hearing impairments. Sign language knowledge is not a 

requirement of this training. An employee refresher every three years is required to maintain 

proficiency in required areas. 

Subpart K, the last section reviewed by Ms. Blank-Riether, pertains to complaint resolution and 

reporting. Airlines must adhere to required procedures for complaint resolution and reporting. 

Each airline must train and make available a Complaints Resolution Officer (CRO) to assist 

passengers with disabilities at each airport the airline serves, by telephone or in-person. A CRO 

must be available when passengers raise concerns about unresolved disability-related matters and 

that CRO must have the authority to resolve the issue. Airlines must send a dispositive written 

response to any written disability complaint within 30 days of receipt. This response must either 

admit or deny violating Part 382 and advise the passenger of his/her recourse to contact DOT. 

U.S. and foreign carriers must record all written disability-related complaints received and 

categorize the complaints by type. Carriers must also submit an annual report to DOT 

summarizing completion. 

In closing, Ms. Blank-Riether reviewed pending and new disability rulemakings. In the Fall of 

2012 a final rule on website and kiosk accessibility is expected. DOT is working on a 

Supplemental Notice of Proposed Rulemaking (SNPRM) on the provision of medical oxygen, 

accessible in-flight entertainment, and service animals. Also, DOT is currently drafting an 

NPRM on requirements for airports to work with airlines to provide captioning on displays, 

service animal relief areas, and lifts. Another NPRM exists on allowing seat-strapping methods 

in transporting wheelchairs in aircraft passenger cabins. Lastly, there is a recently revised 

Technical Assistance Manual and Model Training Program that was published in the Federal 

Register for public comment. 

At the conclusion of this presentation, Committee Chair AG Madigan opened the floor to 

questions from the Committee. 

Committee Chair AG Madigan asked to revisit the matter of CRO’s: how they handle 

complaints, and what oversight their annual complaints reports solicit from the DOT. Ms. BlankRiether replied that airlines investigate and make a determination on each complaint. DOT has 

authority to make a determination as well, but there is no private right of action. DOT can 

monitor carriers for patterns of violations. After a pattern has been identified, DOT can initiate 

enforcement action. 

Committee Chair AG Madigan followed up by asking what part DOT takes in compliance 

investigations. Mr. Podberesky replied that the ACAA amendment from 2000 that included 
CENTRA Technology, Inc. 8 

foreign air carriers in the regulations also required DOT to investigate every complaint. There 

are approximately 450 to 700 complaints per year received by the consumer protection division. 

DOT sends the complainant a notification of receipt, conducts an investigation, makes a 

determination, and asks the carrier to respond. DOT issues a warning to airlines that have 

violated a regulation. If the violation was egregious, or a pattern or practice of violations is 

found, DOT initiates further action. Mr. Podberesky continued by explaining that the airlines 

have to keep categorized records of complaints, which he estimated to be about 15,000 annually. 

They are categorized by the type of violation—for example, wheelchair or boarding assistance. 

Furthermore, DOT takes a proactive role by going out to the major carriers, conducting on-site 

investigations, and reviewing the complaints while ensuring required procedures are in place. If 

an investigator stops at a ticket counter, he or she checks for the documentation and signage that 

is required for compliance. Investigators question gate personnel on their knowledge of 

procedures. DOT estimates that disability-related complaint resolutions take up about forty 

percent of the staff time per year. 

Ms. Blane Workie, DOT, also responded to Committee Chair AG Madigan’s question on 

complaint resolution. Ms. Workie clarified that the FAA inspects airports to check for Section 

504 compliance. The DOT has an informal working relationship with the FAA. The FAA checks 

for compliance with the regulations in Part 382 while conducting inspections. For example, FAA 

inspectors check to see if there are the appropriate service animal relief areas and then supplies 

that information to DOT. This step is not necessarily within FAA’s jurisdiction, but the two 

organizations work together. 

Ms. Workie also mentioned that while some complaints do not involve violations, they still may 

prompt further action. One of the reasons the SNPRM on the provision of medical oxygen exists 

is because of previously filed complaints. DOT recognized a pattern in complaints and a need 

for further rulemaking on this issue. 

Committee member Berg questioned whether the FAA has the authority to enforce the rules 

being discussed. Ms. Workie clarified that they do not. The FAA sends the information to DOT 

and FAA’s responsibility ends there. It is then the responsibility of DOT to follow up. 

Committee member Berg mentioned that FAA inspectors are raising issues about the ability of 

airlines to take off under a minimum equipment list. Ms. Workie clarified that these are two 

separate issues and this does not correlate to DOT’s checklist on aircraft accessibility. The DOT 

is working with the FAA on this and whether the disability equipment should be deemed 

“essential” for operation. Mr. Podberesky also added that the enforcement of Part 382 is by the 

DOT, not Department of Justice (DOJ), and under DOT’s statute is subject to civil penalties. 

Committee Chair AG Madigan asked for the top complaint categories. Ms. Blank-Riether 

responded that wheelchair assistance, and the failure to provide timely assistance, or any at all, is 

the top complaint received and comprises about fifty percent of all complaints received. The 

complaints range from individuals who ordered wheelchairs that never came, to those who 

requested one at the last minute and could not get one. Ms. Blank-Riether guessed that peanut 
CENTRA Technology, Inc. 9 

allergies were the next largest complaint area, but was not sure. Ms. Workie disagreed and DOT 

offered to check the exact statistics and report back to the group after lunch. 

As promised, Mr. Podberesky reported later in the meeting that in 2011, there were 21,372 

written complaints received by U.S. and foreign carriers. Over fifty percent of those, or about 

11,000, alleged failure to assist travelers in wheelchairs. The second-most common complaint 

regarded seating accommodations; the third-most common related to damaged assistive devices, 

most of which were wheelchairs; and the fourth-most common related to the delay in returning 

assistive devices. 

Questions then continued for Ms. Blank-Riether following her presentation. Committee member 

Leocha questioned whether Subpart K allowed emails as “written” complaints. Mr. Podberesky 

confirmed that all emails are considered written as well. He clarified that Subpart K does not 

count verbal complaints in person at the airport. Rather, it requires the passenger to follow up 

with a written complaint if he or she wishes for DOT to investigate the complaint. Related to this 

point, Mr. Leocha mentioned the DOT hotline available to consumers, who are able to call from 

the airport to DOT employees who are available from 9:00 a.m. until 5:00 p.m. on weekdays to 

help resolve real-time issues. Carriers are also required to have a Complaint Resolution Official 

(CRO) available at each airport where they operate to resolve disability issues. Most airlines 

have multiple CRO’s available, both at the airport and at their operations centers. 

Committee Chair AG Madigan revisited the issue of peanuts. She acknowledged this is a 

growing issue in the United States not just for the airline industry, but also in schools. Ms. 

Blank-Riether answered that DOT is not permitted to regulate in this area per Congress. DOT 

has communicated to air carriers that if they do not follow any of their own officially stated 

policies on peanuts or peanut allergies, then DOT will find them in violation by providing 

misinformation. This does not address the peanut issue itself, but is an attempt to provide 

guidance within the parameters placed by Congress. Mr. Podberesky added that DOT more than 

a decade ago sent a letter to the larger carriers suggesting they create a buffer zone in the few 

rows around any passenger who complained of a peanut allergy. He also commented on the fact 

that Congress then specifically prohibited DOT from regulating this specific issue. 

At this time the Committee did not have further questions for Ms. Blank-Riether. Committee 

chair AG Madigan welcomed to the podium Ms. Julie Carroll from the National Council on 

Disability.

Perspectives on Disability Issues in Air Travel by Representatives of the Disability Community 

Julie Carroll, National Council on Disability (NCD)

Ms. Julie Carroll thanked the Committee for soliciting the viewpoint of people with disabilities. 

She introduced NCD as an independent federal agency purposed to promote policies, programs, 

and procedures that guarantee equal opportunity for all individuals with disabilities since 1978. 

Individuals with disabilities encounter unique problems during air travel, many of which could 

be remedied with customer service training of airline personnel and their subcontractors. 
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Heightened security concerns since 9/11 have worsened the hassles for individuals with 

disabilities traveling by air and complaints are increasing. 

The NCD provides an annual report to Congress. The organization’s October 2011 report 

recommended that Congress revisit the ACAA, its regulations and enforcement, to determine 

why airlines are not following these rules. NCD recommended that Congress hold a hearing to 

examine the experiences of travelers with disabilities in order to develop corrective actions. 

This hearing rendered examples of key issues people with disabilities encounter when they fly. 

Some of the issues include the following: 

• Lack of curb-side check in, more common since 9/11, makes it difficult and/or 

impossible for people with disabilities to locate personnel to assist in getting from the 

airport entrance to the ticket counter. 

• Kiosks are not accessible for people with certain disabilities. 

• Air carrier websites are not accessible for people with disabilities and when those 

individuals contact the carrier by phone, the incentives and discounts available online are 

not always offered. 

• Airline personnel often communicate with the disabled traveler’s companion and/or 

escort instead of communicating with the traveler directly. In some instances important 

documents, such as a passport or boarding pass, are turned over to someone other than 

the disabled traveler, and in some cases, this person is not affiliated with the traveler. 

• Subcontractors who provide escort services are not properly trained in how to interact 

with disabled persons. There are some escorts, for example, who will insist that a visually 

impaired person sit in a wheelchair in order to proceed. Escorts often are not aware of 

where service animal relief areas are located. 

• Announcements for pre-boarding on PA systems in gate areas do not effectively 

communicate the gate location for individuals with vision impairments, who cannot 

identify the direction of the voice and thus miss the mandated opportunity for preboarding. 

• Seating remains an issue. Airline personnel often insist on picking the seat for people 

with disabilities. Passengers traveling with service animals are commonly seated in the 

bulkhead even though this area provides less room for the service animal. 

• Many airports do not have service animal relief areas. 

• Announcements in the gate area are typically not accessible for those who are deaf or 

hard-of-hearing. Information about gate changes, reasons for flight delay, and calls for 

volunteers to be bumped when a flight is oversold are only provided audibly. 
CENTRA Technology, Inc. 11 

• Similarly, verbal in-flight announcements are not conveyed to those who are deaf or 

hard-of-hearing. 

• In-flight entertainment is typically not captioned.

• Airlines often damage wheelchairs. 

• During layovers, airline personnel often refuse to bring customized wheelchairs to 

passengers with mobility disabilities. Passengers needing a customized wheelchair are 

given airport wheelchairs, which the passenger may not be able to operate independently. 

• Airlines often require passengers with customized wheelchair or seat cushions to count 

these items as carry-ons, even though the cushion takes neither floor nor overhead space. 

• Airlines do not know how to treat Personal Care Attendants (PCA) assisting passengers 

with disabilities. 

• Though the ACAA requires that air carriers have available, upon request, at all times, a 

CRO to handle complaints of air travelers with disabilities in real time, passengers report 

that when they have requested the assistance of a CRO, air carrier personnel are not 

familiar with the term. 

Ms. Carroll concluded her testimony by quoting an excerpt from NCD’s 1999 report to 

Congress, which, she added, is regrettably still as apt today as it was when written: 

“When they fly, people with disabilities still face uncertainty about whether air carriers 

will provide accommodations such as effective communication of flight information, 

accessible seats, appropriate boarding assistance, and careful handling and stowage of 

their wheelchairs and other assistive devices.” 

Committee Chair AG Madigan then opened the floor to questions from the Committee. 

Committee member Leocha asked Ms. Carroll what the DOT response has been to NCD’s 

reports regarding, for example, the availability of CRO’s. He followed with an additional 

question on whether she felt the publicizing of the 800 number is helping people with 

disabilities. Ms. Carroll responded that airport personnel need to be trained on CRO’s (who they 

are, what they do, etc.). She noted the comment earlier in the morning about the fact that the realtime assistance is available daily 9:00 a.m. to 5:00 p.m. That window neglects a large amount of 

travel time. 

Mr. Leocha asked for Ms. Carroll’s recommendation on how the gate announcement issue could 

be remedied for those with vision impairments. Ms. Carroll suggested that the airlines should 

come and escort such persons to the gate for pre-boarding. She also demonstrated how gate 

personnel could simply re-state pre-boarding announcement away from the PA so that an 
CENTRA Technology, Inc. 12 

individual could follow the direction of the voice. Announcements from overhead do not allow 

the individual to tell where the person is physically standing. 

Committee Chair AG Madigan asked for further explanation on the issues regarding PCA’s. Ms. 

Carroll commented that this issue is most common during flight connections, during which 

PCA’s are less commonly available. 

Committee member Leocha clarified that while wheelchairs and walkers are not counted as 

carry-on baggage, seat cushions sometimes are counted. Ms. Carroll affirmed this fact. 

Committee Chair AG Madigan asked if the NCD complaints reported to Congress are being 

addressed. Ms. Carroll affirmed, but added that the ACAA rules and amendments exist now but 

are inconsistently enforced. 

Committee member Berg questioned whether there were specific statistics for all of these 

complaints. Ms. Carroll replied that there are not.

Committee Chair AG Madigan returned to the issue of service animal relief areas. She asked 

whether a person has to exit and re-enter through security in order to provide relief for a service 

animal. Ms. Carroll affirmed that this is often the case and that since 9/11, security procedures 

have exacerbated delays in returning from these. During connections, these delays often mean 

the individual will not have enough time to reach and return from a service animal relief area. 

The Transportation Security Administration (TSA) does allow individuals traveling with a 

disability to be expedited to the front of the security line, however if that individual is travelling

with others, or with a PCA they are sometimes denied this expedition of the process. Ms. Workie 

added that DOT is working with TSA on this issue. DOT does ask questions on where service 

animal relief areas are located and how people are escorted to and from those areas. There should 

be a DOT final ruling coming out at the end of 2012 or early 2013 on this issue. 

At this time the Committee did not have further questions for Ms. Carroll. Committee Chair AG 

Madigan welcomed to the podium Mr. Kenneth Shiotani from the National Disability Rights 

Network. 

Kenneth Shiotani, National Disability Rights Network (NDRN) 

Mr. Kenneth Shiotani thanked the Committee for the opportunity to speak. He identified himself 

as the Senior Staff Attorney with the NDRN, a membership organization of the protection and 

advocacy programs in each of the 50 states and U.S. territories. NDRN provides advice and 

referral, self-help advocacy information and training, as well as legal representation to 

individuals with disabilities throughout the country. 

Mr. Shiotani addressed the large market and proportion of Americans who have disabilities. The 

most recent U.S. Census reported 57 million Americans have a disability, which is 

approximately 18.7 percent of the U.S. population. The same Census report revealed that people 
CENTRA Technology, Inc. 13 

with disabilities have $200 billion in discretionary spending each year. Airlines should be 

encouraging, not discouraging, the travel and spending by these individuals. 

People with disabilities want the same access and opportunities to choose their air travel options 

as those without disabilities. A particular barrier for individuals with vision impairments is 

website accessibility. Individuals with visual disabilities do not have the same opportunities to 

compare airlines, airports, flight schedules, and fares unless airline and travel websites are 

accessible to people who use technology (screen readers) in order to be able to use those 

websites. Mr. Shiotani was aware of proposed regulations from September 2011by DOT to 

require this but acknowledged that the airlines can accomplish the accessibility of websites 

without a regulation. He was not sure if third party websites, Orbitz.com for example, would be 

governed by the same regulations as airline websites. 

Mr. Shiotani expressed hope that these pending regulations result in rapid implementation by the 

airlines—including airline mobile sites—so that individuals with visual disabilities will have the 

same opportunities to be able to compare flight information and fares, receive delay notices, and 

instantly change or upgrade their flight options from their phones. Today most individuals 

possess and use smart phones on a regular basis, including the disabled community. 

The pending DOT rulemaking also includes the subject of self-service kiosks. Airports are 

currently moving towards this self-service platform and the technology exists, for example in 

ATM’s, to provide inputs for headsets that provide voice prompts for individuals with vision 

impairments. Voice control is another available solution. Additionally, airlines should design 

their kiosks for use by individuals with disabilities. For example, the height of the kiosk would 

be of particular concern for individuals in wheelchairs. 

Next Mr. Shiotani revisited a point made in the first ACACP meeting and pointed out that his 

organization agrees with other consumer advocates that the consumers’ ability to enforce their 

rights needs to be expanded. He cited cases against United Airlines and Jet Blue, both of which 

were dismissed on the grounds of pre-emption, which limits the consumer. The NDRN does not 

think this is the way to proceed; federal law sets the floor of rights, but if states choose to give 

additional rights, consumers should be able to enforce their rights under state law as well. 

Mr. Shiotani closed by stressing that airlines need to focus on customer service. People with 

disabilities do need, at times, minor adjustments in policies and procedures in order to travel 

safely and comfortably. He shared, as an example, the experience of a colleague who uses a 

wheelchair. This individual booked a flight, choosing a specific route which allowed her a 

layover that did not require deplaning. The colleague chose to thus gate check her customized 

wheelchair through to her final destination. At the layover location, a change required the 

passengers to transfer to a separate aircraft unexpectedly and further delays followed. The 

colleague was left in a gate-issued wheelchair that she could not operate independently even after 

requesting her wheelchair be returned to her during the delay. For six hours this individual had to 

endure discomfort and immobility because the airline personnel at the gate failed to 

accommodate her request. Mr. Shiotani concluded that good customer service was the only thing 
CENTRA Technology, Inc. 14 

missing in this scenario and that stronger enforcement by both DOT and private individuals is 

needed when customer service fails. 

Committee Chair AG Madigan opened the floor to questions from the Committee. There being 

none the group was dismissed for a fifteen minute break. 

Tarmac Delay Rule and its Enforcement 

Livaughn Chapman, Senior Attorney, Office of Aviation Enforcement and Proceedings 

Returning from the break, Committee Chair AG Madigan called the meeting to order. She 

welcomed to the podium Livaughn Chapman from DOT. 

Mr. Chapman began his presentation by outlining his points for the Committee. He then 

proceeded to provide a history on the Tarmac Delay Rule. Lengthy tarmac delays hit the national 

spotlight in 1999 when flights were delayed in Detroit for 8.5 hours during a severe blizzard. 

After that event, Congress held hearings on whether to enact a Passenger Bill of Rights.

Following these hearings, airlines agreed to adopt customer service plans to meet essential needs 

during long onboard delays, to prepare contingency plans to address such circumstances, and to 

establish a task force of representatives to develop and coordinate contingency plans to deal with 

lengthy delays. Although this task force formed, efforts never materialized as priorities shifted 

after 9/11. 

The winters of 2006 and 2007 brought delays back to the forefront when severe thunderstorms in 

the Dallas Fort Worth area and snow and ice in Chicago shut down airport operations in those 

cities and delayed and stranded some passengers for over nine hours on the tarmac. Also, in early 

2007 a Jet Blue flight kept passengers on the tarmac of JFK airport in New York for 10.5 hours. 

It should be noted that Delta and Comair experienced similar problems. That day there were 52 

aircraft grounded due to inclement weather and only 22 gates available to service those aircraft. 

DOT received numerous consumer complaints as a result of these incidents. 

U.S. Transportation Secretary, Mary Peters, requested a report from the DOT Inspector General 

(IG) investigating delays and providing recommendations. The IG issued an Audit Report in 

September 2007 that recommended that DOT establish a task force to deal with lengthy tarmac 

delays. DOT established this task force in January 2008. In November 2008, the task force 

completed its investigation and recommended the development of contingency plans by airports 

and airlines for lengthy onboard ground delays to Secretary Peters. 

DOT went beyond the recommendation in rulemakings on airline passenger protections which 

dealt with tarmac delay issues. Consumer Rule I became effective April, 29, 2010, following the 

Advance Notice of Proposed Rulemaking (ANPRM) in November 2007, the NPRM in 

December 2008, and the final rule issuance in December 2009. In the preamble of Consumer 

Rule I, DOT listed a number of areas it was considering addressing in a future rulemaking, which 

became Consumer Rule II. Consumer Rule II was effective for tarmac delays on August 23, 

2011, after the NPRM in June 2010 and the final rule issuance in April 2011. Following both 

Rules, the Enforcement Office published a Frequently Asked Questions (FAQ) document. 
CENTRA Technology, Inc. 15 

Consumer Rule I applied to U.S. carriers, and Consumer Rule II expanded the rule to include 

foreign carriers that operate to and from the United States. The Rules do not apply to airports 

directly, just air carriers. The required adoption of tarmac delay plans (14 CFR 259.4) applies to 

covered U.S. and foreign carriers at large, medium, small, and non-hub airports. The requirement 

to adopt and follow a plan applies only to tarmac delay events that occur at a covered U.S. 

airport, not at foreign airports. 

The contingency plans drafted by the air carriers must include, at a minimum, time limits of three 

hours or less for deplaning on domestic flights and four hours for international flights. The clock 

for this begins when the aircraft door closes or passengers are no longer allowed to deplane. The 

contingency plans also cover provisions for adequate food, potable water, operable lavatory 

facilities, and adequate medical attention while on the tarmac. 

The contingency plans also cover notifications. Carriers must notify passengers regarding the 

status of the delay and of the opportunity to deplane. Mr. Chapman noted that this has been 

something that has been a problem lately. He stated that DOT does not require carriers to reboard a passenger who elects to deplane and, as such, encourages carriers to announce to 

passengers that deplaning is at their own risk and the flight could depart without them. 

Air carriers must provide assurances to DOT that there are sufficient resources to implement 

their plans. They must also assure that they have coordinated the plan with airport authorities, 

U.S. Customs and Border Protection (CBP), and the TSA. Regarding code share responsibility, 

the carrier whose code covers the marketed service governs unless the marketing carrier specifies 

in its contract of carriage that the operating carrier’s plan governs. 

A carrier’s failure to comply with the assurances required by this rule and contained in its 

Contingency Plan for Lengthy Tarmac Delays will be considered to be an unfair and deceptive 

practice within the meaning of 49 U.S.C. 41712 that is subject to enforcement action by DOT. 

Covered carriers must retain, for at least two years, information about any on-ground delay that 

lasts at least three hours. The records must include information about the length and cause of 

delay, the steps taken to minimize hardships for passengers, whether the flight ultimately took 

off or returned to the gate, and an explanation for the tarmac delay. 

Each U.S. air carrier and foreign carrier that has a website marketed to U.S. consumers and that 

is required to adopt a contingency plan for lengthy tarmac delays, shall post its current 

contingency plan on its website in an easily accessible form. 

Prior to the Tarmac Delay Rule, DOT has taken action on carriers forcing customers to remain 

on aircraft for extended periods of time. Mr. Chapman recalled an incident in Rochester, 

Minnesota in 2009 where a Continental Express aircraft operated by ExpressJet Airlines was 

diverted from Minneapolis. The aircraft sat approximately 50 yards from the terminal facility and 

passengers were not permitted to deplane for over six hours because a ground agent erroneously 

believed the passengers could not enter the airport. DOT addressed this with $175,000 in civil 

penalties. 
CENTRA Technology, Inc. 16 

Since DOT has issued the Rules, it has conducted inquiries in response to over 300 investigations 

of reported violations of various provisions. The sources of reports are varied. A vast majority of 

complaints came from the public, filed directly with DOT, though some notifications also come 

from the FAA and the news media. 

DOT reviewed notable orders and warning letters regarding enforcement. There was a penalty 

against American Eagle in May 2011 with $900,000 assessed in civil penalties when 608 

passengers were delayed on the tarmac for more than three hours at O’Hare International 

Airport.. United and Pinnacle Airlines have also had reporting violations where the reported 

length of the delay was not the actual length of the delay. DOT has issued warning letters to five 

carriers involving multiple flights and multiple aspects of the Tarmac Delay Rule. 

Mr. Chapman showed a chart of reported Bureau of Transportation Statistics (BTS) data by 

month from October 2008 to May 2012 that showed tarmac delay times of over three hours. A 

line on the chart denotes the first full month after DOT adopted the Tarmac Delay Rule. The 

chart shows a drastic decrease following that time with only 20 reports in the first 12 months 

following, as compared to 763 for the year prior. A second line after August 2011 denotes when 

DOT enacted Rule II, which included all tarmac delays for both domestic and international 

flights for the first time. 

The FAA Modernization and Reauthorization Act of 2012 required U.S. carriers and operators of 

large hub, medium hub, small hub, or non-hub U.S. airports to submit tarmac delay contingency 

plans to DOT for review and approval. To date, DOT has received 390 airport plans and 61 

carrier plans. These plans require DOT review and approval/changes within 60 days of receipt. 

DOT required that airports submit these plans within 90 days of the enactment on February 12, 

2012. This is a sizeable effort from DOT that is close to completion. 

Mr. Chapman mentioned in closing that critics have argued that these rules impact flight 

cancellations, since large fines prompt air carriers to be more conservative in deciding how 

inclement weather may impact flights. Supplemental review and analysis of the impact of the 

Tarmac Delay Rule are currently underway within DOT and results are expected at the end of 

summer 2012. 

Committee Chair AG Madigan opened the floor to questions from the Committee. 

Committee member Leocha clarified that while the original Tarmac Delay Rule only applied to 

air carriers, the FAA Reauthorization Act required airports and airlines to coordinate. He 

inquired whether DOT has to investigate and enforce against the violations as well. Mr. 

Chapman replied that Part 259 requires carriers to coordinate with airports and DOT can assess 

penalties for statutory violations. Mr. Podberesky affirmed that, for the first time, DOT has 

authority over airports for violations of their contingency plans. Committee member Leocha also 

asked about the fines for violations and whether they are ever split between airports and airlines. 

Mr. Podberesky commented that it depended on the case. Mr. Chapman added that the maximum 

penalty is $27,500. He noted that is the maximum, however, and the fine could be less. 
CENTRA Technology, Inc. 17 

Mr. Leocha questioned whether contingency plans published as pdf.files—inaccessible to 

consumers using some smartphones at the airport—truly addressed accessibility of the 

contingency plans. Mr. Podberesky clarified that the main criteria during review of accessibility 

was evidence of an easy-to-find-and-interpret pull-down menu on the carrier’s website. Almost 

any document can be hard to view on a phone, so when reviewing they did not consider 

smartphones. 

Committee Chair AG Madigan asked to revisit the slide displaying the BTS tarmac delay data 

from the presentation. She wanted to know, of the 300 on-going investigations, what was the 

time period? Mr. Chapman clarified that the 300 investigations were due to reports of violations 

of the tarmac delay rules. The complaints date back to May 2010 which is when DOT began to 

track complaints. Mr. Podberesky supplemented that many of the consumer complaints pertained 

to delays of two hours or less, time period that did not violate the rules. 

AG Madigan asked to explore this further, asking whether DOT investigated complaints about 

delays less than three hours. Mr. Chapman confirmed that while every consumer complaint 

receives a response within 60 days from the air carrier, not all complaints are specifically for 

tarmac delay; that is only part of the rule. Some complaints may also relate to access to food and 

water, for example. 

At this time the Committee did not have further questions for Mr. Chapman and Committee 

Chair AG Madigan welcomed to the podium Mr. John Heimlich from Airlines for America. 

Current Economic and Financial Conditions Facing Air Carriers 

John Heimlich, Vice President, Chief Economist, Airlines for America (A4A) 

Mr. John Heimlich addressed the Committee and offered an overview of his presentation on the 

nascent recovery of the U.S. airline industry and its benefits to the nation. The industry is 

climbing out of a huge financial hole to modest profitability. Diversification of revenues and 

improved alignment of revenues generated with costs incurred have been critical elements of the 

nascent recovery. However, a heavy dose of new and proposed regulations in 2012 threaten the 

recovery. A financially healthy airline industry means job growth and service reinvestment. 

Presently, operational performance is strong and improving, reflected by a remarkably low 

complaint rate – especially compared to other industries with smaller volumes. 

The value proposition for U.S. air travelers is alive and well. A chart with inflation-adjusted 

numbers from 1990 through 2011 displayed steadily improving fuel efficiency, relatively even 

on-time rates, declining fares, and a drastic decrease in fatal accidents over the years. 

Regarding profits, the cumulative net loss for U.S. passenger airlines from 2001 to 2011 was 

$62.3 billion followed by modest profits from 2010 to 2011. However, one or two years out of 

the red do not come close to erasing the deficit carried over from the past 10 years. To date, for 

2012, the airline industry is showing a net loss of $1.1 billion. 
CENTRA Technology, Inc. 18 

A focus on 2011 finances alone showed a bigger picture, displaying a slim margin of net profit of 

$0.81 per enplaned passenger. This number is tallied after accounting for $211.93 in operation 

costs, offset by revenues totaling $212.73—the sum of $8.06 ancillary, $159.53 airfare, and 

$45.14 cargo/other (Source: BTS). 

An examination of investor return on capital (return on invested capital minus weighted average 

cost of capital) showed that, historically, the airlines have not generated a positive return on 

investment. Data show that among other members of the value chain, including manufacturers, 

lessors, airlines, Computer Reservation System (CRS)/Global Distribution System (GDS), and 

travel agents, airlines were the only segment in the red for the two full industry cycles displayed. 

According to Standard and Poor’s (S&P), only one U.S. passenger airline has investment-grade 

credit of BBB- or better. S&P rated Southwest airlines at BBB-, which designates them among 

issuers with relatively high levels of creditworthiness and credit quality. The airline industry’s 

financial condition is improving, but is far from stellar. Among speculative grade credit ratings 

are a large number of U.S. airlines with ratings ranging from BB to D, based on the same S&P 

data. S&P describes speculative grade companies as issuers with an ability to repay but facing 

significant uncertainties, such as adverse business or financial circumstances that could affect 

credit risk. 

A chart displaying a sample of new regulations on U.S. air carriers revealed an approximation of 

$3.3 billion in annual costs, equated to almost 39,000 airline industry jobs. Existing regulations 

displayed included full-fare advertising, flight and duty time, other consumer mandates, and fueltank inserting. Proposed regulations required carriers to provide training, airport hydrant fueling 

systems, and lithium batteries. This data implies that in a scenario of regulatory costs versus jobs, 

over time the airlines will employ fewer people to support operations if there is no 

corresponding revenue to offset these costs. 

Committee member Leocha questioned Mr. Heimlich on how advertising full-fares could cost 

the airlines 12,407 jobs or an equivalent of $1.04 billion (referencing extrapolated data from the 

chart displaying samples of new regulations). Mr. Heimlich replied that this is an estimated 

deleterious effect from the rule, assessed by a consultant on behalf of A4A. Committee member 

Berg added that this is an ongoing cost to the airlines. 

Mr. Heimlich continued to his next slide. Data demonstrates how improved airline finances have 

translated to 18 consecutive months of job growth. U.S. passenger airlines have been able to 

reinvest in equipment and increase airline jobs added during a time of high national 

unemployment. 

Mr. Heimlich displayed data on the rising costs and constraints on revenue production translated 

to air service cuts. Domestically, the United States has a nine percent smaller airline industry 

than five years ago. One way to cope with a decrease in revenues and increase in financial 
CENTRA Technology, Inc. 19 

pressures over the years is to fly less. Specific data displayed 186.2 billion seat miles available1

in the fourth quarter of 2007 versus 169 billion in the fourth quarter of 2012. 

Another chart reviewed various goods and services over the past 11 years relative to inflation. 

According to the BLS data, air travel in the United States remains well below the percentage 

increase in cost to the consumer for products such as eggs, college tuition, gasoline, and baseball 

tickets, just to name a few. This is with or without the inclusion of ancillary fees included in the 

air travel. Meanwhile, the costs faced by U.S. passenger airlines are up by 95 percent. 

Committee member Leocha inquired about an earlier chart showing fuel efficiency skyrocketing. He asked how much fuel efficiency was taken in to account to mitigate costs to air 

carriers. Mr. Heimlich answered that the costs on the chart compared to inflation were just 

straight cost comparisons and fuel efficiency was not a factor there. Fuel efficiency is a factor 

with which airlines cope operationally. When the price of gasoline increases, for example, you 

can drive less or buy a more fuel efficient car. The option to fly less is not factored into the price

of gasoline on this chart. 

A slide comparing the Consumer Price Index (CPI) in key states (California, Illinois, and 

Massachusetts) from 2000 to 2011compared to the price of domestic air travel showed that 

average fares in these states rose less than inflation. While the “average basket of goods” rose 

30.6 percent over this period, the fares showed California up 16.8 percent, Illinois up 7.7 percent, 

and Massachusetts down 2.9 percent. These numbers are based on all-in fares and include 

ancillaries such as average bag and change fees. 

Examining U.S. airline operations over the past five years, BTS and DOT data show a substantial 

improvement. So far in 2012, on-time arrivals are up 11 percent, involuntary denied boarding are 

down 19 percent, mishandled bags are down 57 percent, and flight cancellations are down 51 

percent over the same data from 2007. 

Following evidence of improved operations in the past five years, Mr. Heimlich showed data on 

customer complaints received across a broad spectrum of the transportation industry. U.S. 

passenger airlines were at the lowest end of the spectrum with 1.18 complaints received per 

100,000 customers. 

Mr. Heimlich concluded his presentation by summarizing that the U.S. airline industry is 

climbing out of a huge financial hole, to modest profitability. New, proposed, and/or looming 

regulations in 2012 threaten this financial recovery and jobs. A financially healthy airline 

industry means job growth and service reinvestment. Lastly, operational performance is strong 

and improving, which is reflected in a remarkably low complaint rate – especially compared to 

other industries with smaller volumes. 

Committee Chair AG Madigan opened the floor to questions from the Committee. There being 

none, AG Madigan accepted a question from audience members on whether the numbers from 

 

1

 An available seat mile is one seat flown one mile.
CENTRA Technology, Inc. 20 

the slide with customer complaint ratios and percentages comprised complaints filed with the 

government. Mr. Heimlich replied that the U.S. passenger airlines data was extrapolated from 

DOT data, but the others came from each group’s respective websites. 

At this time there were no further questions for Mr. Heimlich and Committee Chair AG Madigan 

welcomed to the podium Mr. Jim Davidson of Fairlogix. 

Demonstration of Airline On-line Air Travel Shopping Capabilities 

Jim Davidson, Fairlogix 

Let it be noted that throughout this presentation there was ongoing clarification and discussion 

among the Committee on the exact parameters the Committee expected the presentation to cover. 

Conversations revealed that Committee member Leocha and Committee member Berg had 

different expectations and understandings based on conversations that occurred while preparing 

the meeting agenda. Committee Chair AG Madigan ruled that the presenters should proceed with 

their presentation and address any outstanding questions from the Committee in the afternoon as 

necessary. 

Mr. Jim Davidson, CEO of Farelogix, took the podium. He outlined the shift of the airline 

industry to a consumer-centric shopping process, both on the parts of the airlines and travel 

agencies. The travel agency is an important channel for many airlines. The commoditized offer 

of available fare and schedules in the past is now moving to an array of more unique and 

differentiated products and services. The aim of airlines to shift toward these new and better 

travel experiences for the consumer is happening against an entrenched business model that 

serves the GDSs but leaves consumers to fend for themselves. The Internet has given new search 

power to consumers, providing them knowledge of the base fare. Airfare needs to be transparent 

so that consumers can make educated decisions and benefit in today’s retail world, where options 

abound for extra leg room, seat upgrades, and other ancillaries. Mr. Davidson stressed that there 

is no basis for DOT to propose additional regulations regarding ancillary products and services 

and stated that the demonstration will show how allegations that airlines are hiding fees and 

avoiding comparison with competitors will melt away. 

Mr. Davidson summarized the air shopping experience for the end consumer as two sides. On 

one side was the legacy model from a GDS-centric perspective. A flow chart demonstrates how 

an airline host system (OAG) inputs schedule data and ATPCO inputs fare data to a GDS system 

in order to generate an offer to the travel agencies upon a customer request. With this model, 

airlines often do not know who the customer is until much after the sale. On the other side was 

the new consumer-centric model offering real-time communication directly with the airline. The 

airline creates a customized offer for the consumer based on frequent flyer status, travel history, 

and available inventory. 

Committee member Leocha asked where IATA and Google fit into this equation. Mr. Davidson 

replied that they fit into the consumer-centric side of the model. When also asked by Committee 

member Leocha whether this comparison was suggesting that the GDSs cannot do the same 

thing, Mr. Davidson concluded that they are two separate models and stated that he was not 
CENTRA Technology, Inc. 21 

suggesting that the GDS model does not work, but rather that they are two separate approaches. 

He acknowledged that competition is great on both sides of the equation. 

Mr. Davidson then introduced Cory Garner from American Airlines to demonstrate a consumercentric airline product shopping model. 

Cory Garner, American Airlines

Mr. Cory Garner prefaced that two-thirds of American Airlines customers buy their tickets 

through travel agencies. It is his objective and job to make these individuals happy. He continued 

by describing the fully transparent offer of preferred seats via Priceline. Priceline is the second 

largest Online Travel Agency (OTA) in the United States and the first to sell airline preferred 

seats directly. 

Mr. Garner began his demonstration, displaying the OTA webpage with a query for a one-way 

fare. Search results showed in a side-by-side comparison of price and airline. Mr. Garner’s 

assistant (controlling the demonstration computer) selected an itinerary and clicked on the seat 

map. The next page displayed pricing for preferred seats (green seats) as well as no-cost seats 

(blue seats). Seats displaying an “x” were no longer available. The assistant selected a blue seat 

at no extra cost and continued the booking. The next screen required passenger vital data and 

frequent flyer number, if available. Mr. Garner applied his frequent flyer number, which in turn 

granted him platinum status. When his assistant clicked the seat map after entering these details, 

the site displayed new pricing—namely that certain seats were now free based on Mr. Garner’s 

flyer status. 

Committee member Leocha asked whether the seat map and pricing information is available to 

the consumer up front. He questioned why a consumer should have to enter personal details in 

order to see this information and whether entering frequent flyer data at this point was a TSA 

regulation, or a way for the consumer to be “sucked in.” Mr. Garner responded that Priceline 

may display seating information this way because its website does not solicit frequent flyer 

numbers up front. One reason for this is that preferred seats may not be available; a website 

would not display prices for products that are not available. Mr. Leocha asserted again that the 

consumer cannot acquire necessary price information up front and Mr. Garner countered that this 

information is on the screen prior to the purchase step. 

Mr. Garner pointed out further attributes of the Priceline website. The display takes into account 

the customer’s relationship with the airline, which makes it personalized. With Priceline’s launch 

of more efficient technology, it could communicate with the airline to offer the consumer a 20 

percent discount. This is not available on the GDS platform. Mr. Garner suggested that it is in the 

airlines’ best interest to implement a model like this in order to drive revenue at a lower 

distribution cost. The airlines will not be in a position to support any mandate to report ancillary 

fee information to GDS systems until the GDS systems acquire more efficient technology. 

Committee member Leocha raised a question on baggage fees and whether a consumer could pay 

for these on Priceline. Mr. Garner replied that American Airlines does not offer payment for 
CENTRA Technology, Inc. 22 

baggage through Priceline because customers have indicated they do not know how many bags 

they will check for a trip at the point of booking. If the customers did pay up-front and then 

ended up checking less baggage this could add additional waiting time at the ticket counter. It is 

better for American Airlines to offer transparent pricing information for baggage on its website 

and have customers show up at the airport ready to pay those prices. Mr. Garner further 

explained that the airline is not opposed to offering the payment of baggage fees on Direct 

Connect – there is no holding back on that pricing.

Committee Chair AG Madigan asked to see where the baggage fee link was earlier on in the 

demonstration. Mr. Garner’s assistant displayed the slide with the link labeled “baggage fee”. 

Attendee Darla Montalto, representing Major League Baseball (MLB), commented that a large 

group of consumers, such as baseball teams, for example, travel with large groups on 

commercial airlines. These groups commonly know how many bags they will have. If a third 

party is paying for the airfare, then the bags cannot be directly charged to that payer up front. 

The only option is for the team administrator to pay for the bag fees one-by-one upon check-in at 

the airport and later submit lengthy reimbursement requests. She questioned why groups like this 

cannot pay ahead in order to consolidate expenses. 

Mr. Garner stated that usually groups of that size can work directly with their Groups and 

Meeting Department in order to negotiate the waiving of a certain number of baggage fees. Ms. 

Montalto acknowledged that she knew about this option, but argued that the requirement to 

provide printouts and proof of waived fees at the ticket counter still created a hassle. 

Mr. Davidson then resumed his stand at the podium and began a similar demonstration of the 

same scenario through the channel of a travel agency. In his demonstration, Mr. Davidson used 

the booking tool, SPRK. After specifying travel dates and destinations, Mr. Davidson pointed out 

where the website displayed options to pay for upgraded services. Additionally, he showed a seat 

map displayed in real-time directly from the airline website. The seats displayed through 

Priceline at $10 now appeared $14, which is the price in the OTA catalogue. Mr. Davidson 

explained that the data from the Priceline page was from an earlier date and that the sale had 

ended, returning the seat back to the original price. After entering frequent flyer information, Mr. 

Davidson showed that the system returned data showing the same seats at no cost. Mr. Davidson 

noted that this technology is not widely available to the general consumer and there is a 

corresponding DOJ investigation on the blocking of this technology from consumers. 

Mr. Davidson demonstrated in another example that two travelers of different frequent flyer 

status and different preferences could be booked in the same transaction. Airlines are beginning 

to provide this technological capability on their own websites as well. 

Committee Chair AG Madigan asked whether she could conduct a similar search from home. 

Mr. Garner replied that she would not be able to yet, but would in the future. The third party 

vendors need to acquire the technology, but two of the largest OTAs are owned by the GDSs, 

which creates a problem. AG Madigan proposed that Mr. Garner return in the afternoon to 
CENTRA Technology, Inc. 23 

demonstrate live how a consumer, from his or her home, could gather all the fee data necessary 

to make a booking decision. 

Attendee Paul Rudin, from American Society of Travel Agents (ASTA), asked whether the 

Priceline demonstration compared ancillary costs to other carriers. Mr. Garner answered that 

American Airlines is the first to offer this through Priceline. Mr. Rudin supplemented that other 

airlines offer these fees, but Priceline does not show them. Mr. Davidson weighed in adding that 

airlines can do more with their own websites than the travel agency—Priceline in this 

example—can do. He added that 60 percent of worldwide sales are made through travel agencies 

for airfare, so they are far from being counted out of the equation. 

Committee Chair AG Madigan at this time welcomed to the podium, Mr. Bruce Bishins for 

comment. 

Association of Retail Travel Agents (ARTA) Comment 

Bruce Bishins, Managing Director

Regarding ancillary distribution, Mr. Bruce Bishins made the following points: 

• ARTA members do not want the DOT to promulgate regulations of what content and 

functionality should be in the GDSs. 

• Airlines and GDSs (just as other travel technology providers) should themselves come to 

terms as part of commercial negotiations. 

• ARTA members do not want any terms mandated by the DOT which could impact their 

contractual obligations and may prompt GDSs to charge increased fees to subscribers. 

• Let the marketplace dictate what content is available for sale or functionality. 

He added that there are unintended consequences of suppliers and travel agents not coming to 

terms on their own. Not all content is in a GDS. There are huge content gaps missing from small 

operators, low cost carriers, non-Airline Cargo Resources (ACR)/Business Sales Processing 

(BSP), and niche products. Also, blended displays are restricted, giving rise to distorted supply 

and inventory. 

In conclusion, Mr. Bishins affirmed that ARTA is concerned with parallel efforts by the DOJ to 

assess the GDS sector. He mentioned ARTA’s concern over a recent announcement by SABRE 

Holdings to acquire Prism and the fact that DOJ is looking into this. Mr. Bishins suggested DOT 

be mindful of this effort as the assessment expands. Additionally, ARTA is concerned about 

GDSs’ willingness to share strategic information with one another. In summary, no new 

regulations are required in the GDS marketplace. It is a mature market and the airlines and travel 

agents will work things out. 

Committee Chair AG Madigan at this time announced the break for lunch. 
CENTRA Technology, Inc. 24 

Afternoon Session 

GDS Issues – Air Carrier Perspective 

This session began with a general comment from Douglas Lavin, Regional Vice President for the 

International Air Transport Association, North America (IATA-NA). He asserted to the 

Committee that consumers can comparison shop by looking at individual airlines’ websites. But, 

the ability to comparison shop across all airlines on one Amazon-style website is not possible. 

He argued that it would be a waste of the Committee’s time to ask airlines to attempt to 

demonstrate this live. 

Sharon Pinkerton, Head of Policy, Airlines for America 

Ms. Sharon Pinkerton, Head of Policy for Airlines for America introduced the presentation on 

the air carriers’ perspectives. She noted that the DOT’s Consumer Rule mandates that airlines be 

transparent and make consumers aware of their prices prior to purchase. Airlines want the ability 

to customize their product for the benefit of passengers, but contractual provisions are preventing 

GDS from releasing all this information available. GDS markets use market power to charge 

airlines competitive fees and prevent entry of new market forces. A mandate forcing carriers to 

provide content to GDSs is unnecessary and will raise costs for consumers and stifle innovation. 

Monte Brewer, Former CEO, Air Canada 

Mr. Monte Brewer, Former CEO of Air Canada, continued the presentation, explaining how 

information flows in the airline industry from the airlines, to the GDSs, to the travel agencies, 

and to the consumer. Airlines buy distribution services from GDSs in the amount of $7 billion 

annually. GDSs incentivize travel agencies to use large volumes of their data. 

Under the airline industry’s legacy business model, third parties provide information to the 

GDSs, who offer the products to consumers. The airlines do not know which consumer is 

purchasing their products until a sale is made and thus cannot tailor its product offerings to that 

consumer. Under the new airline-controlled business model, the airlines know the consumer and 

can tailor their offerings based on factors such as consumer loyalty. 

With the advent of the Internet, low cost carriers, such as Southwest, have been able to avoid 

using GDS-developed websites and communicate directly with the customer. This has resulted in 

these carriers bringing their innovations to the marketplace faster, thus creating competition. 

But, the rise of technology and Internet-based shopping has also led to two simultaneous battles: 

1. The fight over distribution costs, in which: 

• Airlines pay supra-competitive distribution fees (~$7 billion per year); 

• GDS fees represent $12.00 to $20.00 per ticket; 
CENTRA Technology, Inc. 25 

• There is a growing cost divide between carriers that sell through their websites and 

those using the GDS; 

• GDSs resist new solutions that offer 80% cost savings; 

• GDS payment model incentives are in the wrong place; and 

• Customer ends up paying the cost. 

2. The fight over innovation and revenue, in which: 

• Airlines compete on product differentiation; 

• Airlines, learning to be retailers, desire to customize offerings to the needs of 

individual customers, including personalized pricing (free baggage, VIP service, etc.); 

• Dynamic integration with airline-owned data (e.g. loyalty status; history; inventory) is 

essential; 

• The GDS channel—faced with massive investment in updating their platforms—is 

slow to respond; 

• The “product gap” is increasing between carriers relying on websites and those using 

GDS; and 

• Customers do not have access to new products designed to meet their travel needs. 

Mr. Brewer then provided a real-life example demonstrating the value of the airline-controlled 

business model. In the early 2000s, WestJet was Air Canada’s number one competitor. WestJet 

offered lower fares, but without refunds, food, or seat assignments. While Air Canada was able 

to match the low fares, it could not reduce the high costs of its products. WestJet transacted 

directly with its customer through its website and therefore collected better market data. Air 

Canada needed a customer-driven response. In the spring of 2003, Air Canada made fare families 

available, each with more entitlements. As a result, over 45 percent of customers purchased a 

higher priced product in exchange for increased flexibility and selection. Through its website—a 

direct link to the consumer—Air Canada was able to customize its products and offer lower 

fares. 

Monty Myers, Eureka Software Solutions, Inc. 

Mr. Brewer transitioned the presentation to Mr. Monty Myers, a technology expert at Eureka 

Software Solutions, Inc., who began by asserting that personalization and tailored offers are 

well-established in the marketplace as demonstrated by companies such as Amazon, Groupon, 

and Netflix. 
CENTRA Technology, Inc. 26 

Mr. Myers then contrasted the new airline business model and the legacy model. 

The new model, based on Direct Connect, offers: 

• Personalization technology/capabilities enabled by the Internet and technological 

advancements (e.g., audio and video shopping options); 

• Improved transparency; 

• Efficient and robust comparison shopping; and 

• Timely support for airline innovation and evolution. 

At this point in the presentation, Committee member Leocha questioned why there was a 

discrepancy between airlines and GDSs with regard to whether airline product data was open and 

transparent. Mr. Myers responded that airlines do make this data available but that his focus was 

on whether technology exists to support the data. Both Committee member Leocha and Mr. 

Myers agreed that more information and available choices is better for consumers. 

Mr. Myers continued his presentation, stating that the legacy model—standing on technology 

from the 1960s—has resulted in: 

• Slow innovation that has not taken advantage of the power of Internet; 

• Limited adoption by airlines worldwide; 

• No support to true consumer-centric personalization, dynamic, up-to-the-minute 

relevance for consumers, or robust comparison shopping/booking; and 

• Stifled innovation due to airline standardization/commoditization. 

Putting airlines in a position to force this legacy model does not allow them to compete and put 

their best foot forward. 

Committee member Leocha interjected a point that by code sharing, airlines are commoditizing 

and telling consumers that seats on various airlines are exactly the same. Mr. Myers responded 

that code-sharing does not mean airlines are commoditizing their products but that customers 

should have the option to buy commoditized fares. 

Mr. Myers continued to contrast the new and legacy models. The new model promotes: 

• Advanced shopping and pricing engines; 

• Widely accepted Internet technology; 
CENTRA Technology, Inc. 27 

• Fast changes and response time; 

• State-of-the-art mainstream software and hardware core technologies; 

• Ready availability of talented software and hardware engineers; and 

• More robust ecosystem of third-party tools and technologies. 

The legacy model maintains the GDS’ role as gatekeeper and results in: 

• Substantial increases in the amount of data uploaded to GDS; 

• Large delays in uploading and processing data in antiquated model, resulting in latency; 

• A lack of personalized and transparent shopping early in shopping process; and 

• GDSs openly pushing to control even more of airline data (e.g., detailed information 

about customers). 

One audience member interjected here that her personal experience with airline shopping is that 

GDS pushes data in minutes. Mr. Brewer countered that this data does not include the latest 

fares. 

Al Lenza, CEO, Lenza Group 

Mr. Myer then turned the presentation over to Mr. Al Lenza, CEO of Lenza Group, who focused 

on how market dynamics affect adoption. Travel agencies generally have not adopted data on 

ancillary products because GDSs are incentivized to be the sole owners of this data, making it 

difficult for third parties to transfer this information and consumers. Travel agencies 

misrepresent this problem as a result of inefficient technologies, but the real issue is that the 

GDSs are not providing the data. 

In response to emerging competition, GDSs have used incentive fees to create restrictive 

contracts that lock in travel agencies and airlines. These contractual limitations prevent new 

entrants to the airline industry. GDSs have not invested in the requisite technology to support full 

personalization for fear of losing market control to lower-cost competitors. Deals between 

airlines and GDSs have yet to produce meaningful results. 

Contracts between GDSs and airlines or travel agencies often require near exclusive use of a 

single vendor, penalize airlines’ or agencies’ use of new technologies outside of the GDS 

platform, and restrict comparisons of GDS and non-GDS product information. As a result of 

these contracts, airlines must provide all published fares and inventory and thus cannot offer 

lower fares via less expensive channels. They also cannot incentivize travel agencies to use nonGDS technology or share with them the cost of GDS booking fees. 
CENTRA Technology, Inc. 28 

Mr. Lenza concluded by noting that there are a number of sensitive negotiations with GDS 

underway in the next 18 months that could cost the airline industry another billion dollars. 

Airlines want the same outcomes as customers, but forcing a technology or platform will stifle 

growth and will not answer the Committee’s goals. 

Committee member Leocha responded to the presentation with a question on why the airlines are 

not making the cost of ancillary products transparent on their own websites. Mr. Lenza explained 

that this information is available but the challenge for the airlines is when to include this 

information in the shopping experience, given that the cost can change depending on the identity 

of the customer. Offers and schedules come and go; this cost information is not static. But the 

airlines do not oppose transparency and do not restrict customers from receiving this 

information. 

Mr. Leocha then questioned how the airlines could claim that contracts with GDSs are one-sided 

since any negotiation is between two parties. Mr. Lenza explained that as costs have risen, 

airlines have accepted these contracts because of financial constraints. 

Committee Chair AG Madigan interjected to ask about the duration of the contracts between 

airlines and GDSs. Mr. Lenza responded that they typically last five to seven years. To this, 

Committee Chair AG Madigan commented that this period was a “lifetime in terms of 

technology.” 

Gary Doernhoefer, International Air Transport Association (IATA) General Counsel 

To conclude the presentation, Mr. Gary Doernhoefer, General Counsel of IATA, addressed 

consumer expectations and what airlines can provide. 

Consumers should expect: 

• A choice of competitive services related to air travel; 

• To know the choices and services available to them;

• To know the cost TO THEM of each choice; 

• To be presented with offers that are designed to meet their particular needs; 

• The ability to choose the services they want and not pay for what they do not want; and 

• To know the cost of the entire trip BEFORE they purchase the ticket. 

Consumers cannot expect an airline to market its competitor’s products. It is the role of the travel 

agent to provide the price comparisons for the consumer. Through their own and travel agents’ 
CENTRA Technology, Inc. 29 

websites, airlines can offer personalization of ancillary products, and thus an additional revenue 

stream. 

The technology that moves data about personalized ancillary products from the airline to the 

travel agent is critical. Airlines do not perceive that GDSs are the best or only way to transmit 

this data. At least one startup company has provided a link from the agent to the data that is 

preferable to anything the industry has seen before. As a middleman or gatekeeper of airline 

data, GDSs are not mandated to display data from all airlines. They do not have to disclose to 

travel agencies which airlines’ data is not available. If a question arises about products, GDSs do 

not have to consult with the airlines. But, the airlines want to bridge this gap between their 

information and that which is available to the travel agents. 

The proposed DOT mandate would result in a static set of “core” services that will limit 

consumer choices, result in confusion during comparison shopping, preserve the GDS legacy 

business model and give GDSs leverage in negotiations with airlines, lock in high costs, and fail 

to open the market to new innovation. 

Consumers are best served by choice and a lower cost of distribution. GDS involvement limits 

choice, inhibits transparency, and increases costs. Airlines, contrastingly, are investing to provide 

choice through their own websites, travel agencies, but not through GDSs. The airline industry is 

looking for alternatives against market barriers. 

There are some GDS deals with airlines that are beneficial to both sides, but this trend is slowgrowing. Airlines want more of these deals faster. The proposed mandate would only slow 

forward progress. 

At this point, the Committee amended the agenda to allow GDS vendor perspectives to follow. 

GDS Issues – Vendor Perspective 

Chris Kroeger, Sr. Vice President, SABRE Holdings 

Mr. Kroeger, Senior Vice President at SABRE Holdings, began the presentation by stating that 

SABRE’s primary focus was on the travel consumer. The consumers—categorized as either 

leisure or corporate travelers—can use a plethora of booking tools including airline websites, 

meta search websites, online and offline travel agencies, and corporate booking tools. With each 

booking option, consumers use the shopping engine provided by that vendor. Consumers want to 

know the total price. 

At this point, Committee member Berg wanted to clarify whether Mr. Kroeger’s point was that 

consumers are not seeing the full price when they shop on airlines’ websites. Mr. Kroeger 

explained that his point was only to express that consumers have many options and should see 

the total prices across all options. 

Mr. Kroeger continued explaining that DOT has already stepped in to ensure transparency of this 

pricing information. Taxes and fees, fuel surcharges, and baggage fees are transparent to 
CENTRA Technology, Inc. 30 

consumers. GDS providers are now able to show applicable fees. The next step is disclosure of 

ancillaries and transactability. 

David Schwarte, Special Counsel, SABRE Holdings 

Next, Mr. David Schwarte, Special Counsel at SABRE Holdings, took the floor. He opened by 

stating that he has been in the airline industry for 40 years. His focus was to shed light on the 

problem and explain why DOT can solve it. Consumers pay enormous amounts in ancillary fees: 

$22 billion in 2011, $11 billion of which was to the four “big” U.S. carriers. In the past four 

years, airlines have only disclosed base fares, not the other fees (baggage, reserved seats, early 

boarding, etc.). This technique, known as “shrouding,” reduces competitive pressure and allows 

airlines to increase prices. At this point Mr. Schwarte referenced the GAO report from July 2010. 

Airlines claim that they are making prices available to consumers, but a multitude of consumers 

disagree. Airlines have avoided consumer laws and the Federal Statute that DOT administers 

does not afford any private remedy or the ability to sue. There is no discipline, therefore, on 

consumers’ ability to sue and get redress. Consumers in air travel do not have the rights that 

consumers in other industries have. The Federal Trade Commission (FTC) acknowledged this 

problem and opened up a workshop on “drip pricing.” The FTC Chairman made a statement to 

promote price competition while acknowledging that “drip pricing,”—advertising only part of 

price—can mislead and harm consumers. If the DOT enforces a regulation to restore fair and 

honest disclosure, it could lead the way in solving this problem. 

Mr. Kroeger took over the presentation at this point to explain that SABRE is the first electronic 

travel marketplace and enables buyers, including global agencies and government, to access 

sellers’ products. Sellers, in turn, can collect data from SABRE’s sales in order to differentiate 

their products. 

Committee member Berg interjected a comment that any agreement between GDSs, airlines, and 

travel agencies, involved an exchange of rights. Mr. Kroeger stated that he would dispel certain 

myths surrounding that point later in the presentation. 

Shelly Terry, Senior Director of Airline Merchandising, SABRE Holdings 

Ms. Shelly Terry, Senior Director of Airline Merchandising, SABRE Holdings, took the floor 

next to present a live online demonstration of the SABRE Red workspace—the application 

agencies use to shop, book, and service travelers. 

The SABRE Red workspace allows agents to retrieve data on approximately 400 airlines. At the 

heart of the workspace is the shopping engine which holds data on schedules, fares, and 

inventory/availability. 

Schedule information is core to the shopping process. Agents must know which airlines fly 

between any two points. Schedule data are published through certain vendors, but airlines can 

also directly update their schedules into SABRE’s shopping engine at any time. 
CENTRA Technology, Inc. 31 

Fare information is the next core ingredient. Through these data, airlines advise about monetary 

components, rules, penalties, and discounts. Typically, fare vendors such as ATPCO publish 

these data, but up to 25 percent of data comes as a direct file share from airlines. 

The third data component is inventory. These data are the result of interactive connectivity with 

several hundred airlines around the world to determine last-seat real-time inventory status. If 

inventory data are not available, the agent cannot quote or buy for the listed fare. Airlines have 

sophisticated controls for this inventory. 

For all three shopping ingredients, the airlines have direct control over their data and whether a 

GDS receives it. With the SABRE Red shopping engine, SABRE is able to process and transmit 

the data to the travel agent as a simple search matrix of results across multiple airlines. 

Through this system, comparison shopping across airlines is possible and works by leveraging 

IATA’s standards. Airlines participated in the creation and development of these enhancements 

to the comparison shopping experience. 

During the “Settlement” step in the SABRE Red workspace, consumers can shop, book, and pay 

all fees through SABRE, which then delivers an e-ticket. 

Mr. Doernhoefer of IATA asked at what point the SABRE Red workspace allowed the airlines to 

know the consumer’s identity in order to communicate tailored price offerings through the agent. 

Mr. Kroeger responded that SABRE sends consumers’ frequent flyer numbers directly to the 

airlines during the “inventory” stage of the shopping process to retrieve tailored pricing 

information. 

Ms. Terry continued with her demonstration, conducting a fare-led live online search through 

SABRE Red. On the main page, she clicked the “Air Extras” button to show how SABRE allows 

the travel agent to select the consumer’s requested ancillaries such as baggage, meals, medical 

services, pet services, and services for unaccompanied minors. 

SABRE Red delivered 50 search results in low to high order, inclusive of base fares, taxes, 

surcharges, and ancillaries requested. The agent can select an airline—for the purposes of the 

demonstration Ms. Terry selected US Airways—to view a full breakdown of ancillary fees 

(provided the airline has disclosed this information to SABRE). 

Committee member Berg questioned where SABRE collects the data on ancillary fees. Ms. Terry 

responded that the data comes from the SABRE Red shopping engine, where it was uploaded 

directly by the airlines or from third party vendors such as ATPCO, which also collect the data 

directly from the airlines. Mr. Kroeger added that where there is a discrepancy in data available, 

SABRE could address this through a commercial agreement. 

Ms. Terry continued with her demonstration, showing through the SABRE Red workspace where 

the travel agent could enter the consumer’s name and display a graphical seat map. At this stage, 
CENTRA Technology, Inc. 32 

the agent can enter the consumer’s frequent traveler information to deliver tailored seating 

information from the airlines. Ms. Terry explained that, as evident in the demonstration, US 

Airways had not yet distributed to SABRE its tailored seating information, but that SABRE is in 

negotiations with US Airways to exchange that information. 

SABRE provides comparison shopping services to any OTA. Contrastingly, if a consumer shops 

directly from an airline’s website, information is not displayed as clearly. Ms. Terry 

demonstrated the shopping experience on the American Airlines website as an example. On this 

website, the consumer must click “Baggage and Optional Service Charges,” and read through a 

matrix of information in order to determine basic ancillary costs. Ms. Terry then portrayed 

American Airline’s seating graphic and noted that it did not display any pricing information at 

this point. The consumer can only view the pricing information on the seating chart after 

selecting a fare and inputting his or her frequent traveling number. Ms. Terry explained that the 

SABRE Red workspace can display the difference between a paid or free seat as long as the 

airlines have disclosed this information. 

Next, Mr. Kroeger took over the presentation again, with the stated intention of dispelling IATAs 

and some airlines “false claims” about SABRE, which include: 

• SABRE uses old technology, 

• maintains high prices, 

• cannot handle ancillaries, and 

• operates as a monopoly. 

Mr. Kroeger addressed these claims by explaining: 

• SABRE invests hundreds of millions of dollars in new technologies each year. The 

average age of SABRE’s technological equipment is less than three years. 

• SABRE’s $7 billion price tag represents only one percent of airlines’ expenses. For major 

U.S. airlines, SABRE’s fees have declined in the past 10 years. SABRE booking fees 

have declined by a number that SABRE has disclosed to DOT but is confidential to the 

public. 

• Hundreds of airlines, including WestJet, use SABRE to distribute data because they 

derive value from the services SABRE delivers. 

• SABRE does not charge consumers extra for providing ancillary fees. 

While airlines contest that there is no need for DOT action to improve transparency, SABRE and 

consumers disagree. 
CENTRA Technology, Inc. 33 

Mr. Kroeger explained that SABRE is requesting transparency on airlines’ total prices, especially 

on essential ancillaries. He differentiated essential ancillaries from non-essential as those items 

that are critical to a travel purchase decision (e.g., baggage fees). This does not include 

ancillaries such as blankets, pillows, and meals. A DOT regulation will help achieve 

transparency of this information. 

At the conclusion of this presentation, Committee Chair AG Madigan allowed for questions from 

the Committee. 

Committee member Berg commented that airlines mostly agree with SABRE’s concluding 

remarks. On behalf of the airlines, he asserted that the airlines’ ability to be completely 

transparent with pricing information depends on whether or not they can negotiate reasonable 

contracts with GDSs to provide this information to travel agencies. He asked: if DOT issues a 

mandate for airlines to provide this information to the GDSs, how does SABRE respond to the 

consequent imbalance in the contracting power between SABRE and the airlines? 

Mr. Kroeger responded with the question: are consumers’ rights negotiable? He explained that 

SABRE does not charge airlines anything for data on ancillaries. DOT’s proposed mandate 

would not require airlines to participate with GDSs; rather, it would require full disclosure of 

fares from the airlines that choose to participate with the GDSs. 

Committee member Berg reasserted that there is not balance in market power between GDSs and 

the airlines. To this, Mr. Kroeger responded that the airline industry is highly competitive. When 

airlines owned GDSs, 80 percent of ticket sales were conducted through these transactions. 

Today, the industry is more competitive and only 50 percent of ticket sales occur through GDSs. 

Mr. Schwarte of SABRE joined the discussion at this point to address the argument that airlines 

have no leverage with GDSs. He pointed to statements from major airline executives elaborating 

on good business deals with SABRE. He also stated that a history of negotiations have shown 

that airlines successfully negotiate and put pressure on GDSs to receive deep discounts. He 

asserted that if GDSs had all the leverage, SABRE would not have to provide discounts; rather 

the competitive industry has forced companies like SABRE to resort to this. Mr. Schwarte also 

stated that SABRE is cooperating fully with investigations by the DOJ and is confident the 

investigations will conclude that SABRE’s practices are legitimate. He concluded by pointing 

out the irony of airlines accusing GDSs of anti-trust violations after several of them have plead 

guilty to criminal price-fixing in the past. 

At the conclusion of this question and answer period, the Committee amended the agenda to 

insert the individual airline comments at this point in the afternoon’s proceedings. 

Individual Airline Comments 

Cory Garner, American Airlines 

In response to the SABRE presentation, Mr. Garner stated that on American Airlines’ website, 

all fees are transparently listed on the first page; he contested Ms. Terry’s earlier comment that 
CENTRA Technology, Inc. 34 

this information was not available by explaining that she did not scroll down to display the full 

page. 

Mr. Garner explained that since Ms. Terry had already demonstrated the American Airlines 

website, he would now perform a demonstration of the Travelocity website, which retrieves its 

data from SABRE technology. Using the same search term Ms. Terry used, Mr. Garner 

demonstrated that Travelocity does not display the same results as SABRE Red workspace. 

Rather, Travelocity pulled the graphics directly from American Airlines’ website. Mr. Garner 

explained that through this demonstration, he intended to show that SABRE unfairly 

demonstrated its capabilities. SABRE portrayed more information on its own workspace than 

what is provided to Travelocity. 

Committee member Leocha asserted at this point that neither American Airlines nor SABRE had 

demonstrated that complete transparent data is available to the consumer today. Mr. Garner 

responded that American Airlines’ ideal for transmitting data is not possible today but that the 

data are available, transactable, and that SABRE has the power to post them to its shopping 

engine today. American Airlines wants the choice to be able to use a cheaper alternative to 

GDSs.

Peter Kenney, Delta Distribution Systems 

Mr. Kenney began by stating that Delta has no interest in hiding its ancillary services and that to 

suggest that Delta is trying to withhold these data is ludicrous. He urged the Committee to 

consider, rather, that airlines are working with GDSs to establish economic and technological 

conditions for transmitting this information. Delta is in agreements with Amadeus and Travelport 

to distribute ancillaries; this requires significant work from Delta to be able to achieve 

agreements that will work within commercial terms acceptable to the airlines. 

Mr. Kenney stated that if DOT imposes regulations, it will interrupt the process of negotiating 

commercial terms that work. He added that airlines are not in a position to negotiate reduced 

rates and ancillary packages with GDSs. It costs airlines three times as much to conduct ticket 

booking with GDSs as with their own websites. These costs are still too high and airlines want to 

be able to conduct meaningful negotiations without government interference. 

Committee member Leocha questioned whether Delta was prioritizing itself over consumer 

rights. Mr. Kenney responded that this was a “ridiculous claim.” The alternative outcome—the 

initialization of the mandate by DOT—would result in prioritization of GDSs, rather than 

consumer rights. Delta’s view is that GDSs are arguing for transparency as a cover for asking 

DOT to interfere with market negotiations. Delta is not trying to hide information; it does not 

want unhappy customers. Delta had been filing its data with full transparency to ATPCO for 

years. 

Curtis Kopf, Alaska Airlines 

Mr. Kopf acknowledged that Alaska Airlines is a small airline relative to American Airlines and 

Delta. He stated that even as a smaller airline, Alaska Airlines’ experience negotiating with 

major GDSs is an example that a competitive environment exists for ancillary services. This 
CENTRA Technology, Inc. 35 

negotiation resulted in a business relationship with GDSs that supported consumer needs. That 

outcome came with no government interference. 

Mr. Kopf explained that these negotiations were long and complex, but successful, because they 

forced both parties to focus on the issues that mattered, and the business needs of the airline, the 

GDS, and the consumer. The negotiating parties challenged each other and arrived at the right 

result. A true negotiation is meaningful because either party has the right to walk away. DOT 

interference would undermine this basic negotiation principle. A DOT mandate would give 

GDSs the advantage, which is not the right outcome for airlines, GDSs, or consumers. 

Mr. Kopf added that Alaska Airlines conducts its business primarily through its own website. 

Here, the most important conversation happens daily between the airline and the consumer 

through a survey. Customers tell Alaska Airlines what they want daily and as a result, the content 

of the website is highly rated. 

After Mr. Kopf concluded his comments, Committee Chair AG Madigan asked about the length 

of the contract term Alaska Airlines had negotiated with the GDSs. Mr. Kopf responded that he 

could not reveal specifics but could state that contracts could last up to five years. 

Committee Chair AG Madigan then opened the floor to comments from the Committee. There 

were no further comments. 

Committee Chair AG Madigan then opened the floor to audience members for questions and 

comments. 

Mr. Paul Ruden of the American Society of Travel Agencies commented that he was interested 

in Mr. Kopf’s view and questioned why Alaska Airlines was able to negotiate satisfactory 

agreements with GDSs while other airlines could not. Mr. Kopf responded that his point was 

only that the process of negotiation is the right way to resolve the transparency issue between 

airlines and GDSs, not regulation. 

Mr. John Gustafson of US Airways commented that his airline is working closely with SABRE 

on delivering data on seating pricing and hoped to provide this data before the end of 2012. He 

conceded that the majority of travel agencies use their own preferred booking interfaces rather 

than the tools SABRE is developing. Although US Airways has sold preferred seating on its 

website since July 2010, the GDSs have not been able to get this information to the consumer 

and airlines do not know where the data goes. 

To this comment, Mr. Kroeger of SABRE responded that when DOT first required that travel 

agencies and airlines display baggage fees, SABRE could only collect this information from onethird of airlines. Over time this number has grown. Online travel agencies faced with the 

challenge of finding this information can collect it more efficiently from SABRE. SABRE has 

the information, but the OTAs need time to build the capabilities necessary to display the 

information. 
CENTRA Technology, Inc. 36 

Bruce Bishins, ARTA, called attention to SABRE’s contention that airlines will not pay to 

deliver ancillaries. He then asked who would pay, asking specifically if the travel agencies would 

have to pay a premium contract fee with the GDSs. 

Mr. Kroeger responded that SABRE requires $0 from the buyer or seller to obtain ancillary fees. 

Rather, SABRE itself pays for these data by making hundreds of millions dollars of investments 

yearly to enable the availability of this data. 

Mr. Bishins responded that Travelport and Air Canada struck a deal for data that required travel 

agencies to contribute financially. He asked SABRE to express their views on whether or not 

GDSs will eventually charge buyers and sellers for the technology necessary to provide data on 

ancillaries. 

Mr. Kroeger responded that he would not comment on other GDSs and stated that the industry is 

competitive. 

Mr. John Gustafson of US Airways commented that SABRE currently has the data that it will 

shortly roll out to subscribers. US Airways pushed to include Travelocity in this group of 

subscribers but does not believe Travelocity has the intention to display preferred seating costs in 

its system. He commented that individuals could influence their own respective travel agencies 

to distribute this data to consumers. 

Mr. Kroeger added that SABRE is in private discussions with US Airways and Travelocity to 

make this happen; the negotiation has come down to the remuneration model between the airline 

and OTA. 

Ms. Donna Bibbo, Travel Manager at NovoNordisk, commented that travel managers need an 

easy way to collect all available information and control costs. 

Ms. Elizabeth Mandarino, President of World Travel, Inc., explained that her company’s deals 

with GDSs do not prohibit it from introducing new technologies. She stated that World Travel, 

Inc. is pleased with its GDS platform. Direct Connect does not get traction because it does not 

work. GDSs incentivize companies to enter deals with them, but Direct Connect attempts to do 

the same. 

Ms. Darla Montalto, MLB, commented that she was one of few corporate representatives 

attending the meeting. The argument that there are only four to five GDSs with which to 

negotiate is ironic given that there are also only four to five airlines in the same negotiations. In 

this capitalistic society, airlines have to negotiate with GDSs to avoid regulations. The end 

consumer just needs to know the fees. If corporations have to ask the government to step in to 

get this information, they will. 

Ms. Patty Higginbotham, General Counsel and Vice President of Government Affairs at the 

Global Business Travel Association, stated that all distribution channels should include ancillary 
CENTRA Technology, Inc. 37 

fees. Airlines and GDSs must come to the table to negotiate. Corporate travel buyers are caught 

in the middle and do not want DOT to step in and impose a mandate. 

Mr. Kevin Mitchell, Chairman of the Business Travel Coalition, indicated his agreement with 

the previous travel buyers but made the key point that the airline industry is a broken market. He 

asserted that only intervention by DOT would break the stalemate. We have encountered many 

fees since 2008; corporations are paying the price and consumers are harmed because the 

marketplace is not disciplining these fees. The market has failed to bring GDSs and airlines 

together to make the necessary deals. 

Committee Chair AG Madigan concluded the afternoon discussion by thanking the audience for 

the comments and acknowledging that the question at hand is a very difficult issue. She spoke on 

the Committee’s behalf that it was enlightened and would follow up on these issues at a third 

meeting in September. 

Mr. Podberesky provided the following closing remarks: 

DOT will publish a notice for the third meeting of the Advisory Committee at least 15 days in 

advance of the meeting date, targeted for the end of September. DOT will provide the agenda 

one to two days in advance of the meeting. The contractor, CENTRA Technology, Inc. will 

provide a copy of the third meeting notice to attendees of the second meeting in advance. 

Transcripts from the first meeting on June 28th are still under review and will be posted to the 

docket by CENTRA. CENTRA will also post copies of presentations and minutes from the 2nd

meeting to the docket. 

 
CENTRA Technology, Inc. 38 

COMMITTEE MEMBER BIOGRAPHIES 

The Honorable Lisa Madigan 

Ms. Madigan is Attorney General (AG) of Illinois and officially chairs the Advisory Committee 

on Aviation Consumer Protection. AG Madigan serves as a representative of state and local 

governments with the Committee. She was elected the first woman Attorney General of Illinois 

in 2002 and won a third term in 2010. As Attorney General, her priorities have included 

protecting consumers from financial fraud and unsafe products, as well as protecting seniors in 

nursing homes. 

Deborah Ale Flint 

Ms. Ale Flint serves as a representative of airport operators with the Advisory Committee on 

Aviation Consumer Protection. She was appointed Oakland International Airport’s Director of 

Aviation in 2010. Ms. Ale Flint is the primary executive responsible for the operation, 

management, and development of the airport. She previously served as manager of the airport’s 

airside operations where her responsibilities included noise abatement and environmental 

compliance. 

David A. Berg 

Mr. Berg serves as a representative of air carriers with the Advisory Committee on Aviation 

Consumer Protection. He was named Senior Vice President, General Counsel and Corporate 

Secretary for Airlines for America (A4A) in 2011. At A4A, Mr. Berg is responsible for the 

association’s legal affairs and has been involved in a variety of aviation issues, including 

passengers with disabilities and airport landing fees. 

Charles Leocha 

Mr. Leocha serves as a representative of aviation consumers with the Advisory Committee on 

Aviation Consumer Protection. He is Director of the Consumer Travel Alliance (CTA) which he 

formed in 2009, following a career in journalism where he specialized in reporting on travelers’ 

rights. Since beginning CTA, his advocacy for travelers has included meeting government 

officials, testifying before Congress and developing travel information and resources.