IATA chief: DOT consumer rule is a ‘yesterday solution’
Oct 15, 2014 Karen Walker
IATA CEO and DG Tony Tyler has called the US Department of Transportation’s (DOT) proposed Consumer
Rule III a “yesterday solution” and warned against regulation that can stifle air travel innovation.
Speaking Wednesday at the IATA World Passenger Symposium in San Diego, Tyler said there was a “shadow
overhanging” initiatives to deliver a revolution in the passenger experience.
“Government regulators are substituting their own judgment for that of the marketplace. Their continued
interventions run the real risk of stifling the very initiatives we are pursuing for the second century of air
travel. This particularly is a problem in the United States, I am sorry to say. A prime example is the so-called
Consumer Rule III proposed by the DOT. This aims to address marketplace problems that do not exist,” Tyler
said.
“Among its provisions is one that would require each airline to allow any travel agent that sells its tickets to
display the airline’s core ancillary services and fees as well. What other industry is forced by regulation to
market its products through channels it has not chosen?”
Tyler said the proposed rule would oblige airlines to display ancillary information on their own websites.
“This begs the question of what problem DOT is trying to solve? Nobody has suggested that consumers are
unable to purchase ancillary services or to see how much they cost on an airline’s own website. If passengers
can readily ascertain the information that is the subject of the proposed rule, where is the unfairness or
deception that triggers DOT’s regulatory authority?
“Even if DOT had the legal authority to impose this requirement, the proposed rule is, at best, a “yesterday
solution” to an issue that industry is well on its way to solving.”
Tyler said airlines are progressively signing bilateral agreements with global distribution system providers for
the distribution of ancillaries, with more than 50 such agreements concluded.
“So the marketplace is already doing what the regulation seeks to achieve—and I would add, much more
efficiently. But even more significantly, NDC [the IATA New Distribution Capability standard] sets us all on a
course to far greater transparency and granularity in the marketing of air transportation than DOT could
even imagine today.”
Tyler added, “The industry not only respects regulation, it depends on it. But more is not necessarily better,
and that is particularly the case when it risks undoing the benefits of market liberalization and innovation.”
IATA chief: DOT consumer rule is a ‘yesterday solution’
Oct 15, 2014 Karen Walker
IATA CEO and DG Tony Tyler has called the US Department of Transportation’s (DOT) proposed Consumer
Rule III a “yesterday solution” and warned against regulation that can stifle air travel innovation.
Speaking Wednesday at the IATA World Passenger Symposium in San Diego, Tyler said there was a “shadow
overhanging” initiatives to deliver a revolution in the passenger experience.
“Government regulators are substituting their own judgment for that of the marketplace. Their continued
interventions run the real risk of stifling the very initiatives we are pursuing for the second century of air
travel. This particularly is a problem in the United States, I am sorry to say. A prime example is the so-called
Consumer Rule III proposed by the DOT. This aims to address marketplace problems that do not exist,” Tyler
said.
“Among its provisions is one that would require each airline to allow any travel agent that sells its tickets to
display the airline’s core ancillary services and fees as well. What other industry is forced by regulation to
market its products through channels it has not chosen?”
Tyler said the proposed rule would oblige airlines to display ancillary information on their own websites.
“This begs the question of what problem DOT is trying to solve? Nobody has suggested that consumers are
unable to purchase ancillary services or to see how much they cost on an airline’s own website. If passengers
can readily ascertain the information that is the subject of the proposed rule, where is the unfairness or
deception that triggers DOT’s regulatory authority?
“Even if DOT had the legal authority to impose this requirement, the proposed rule is, at best, a “yesterday
solution” to an issue that industry is well on its way to solving.”
Tyler said airlines are progressively signing bilateral agreements with global distribution system providers for
the distribution of ancillaries, with more than 50 such agreements concluded.
“So the marketplace is already doing what the regulation seeks to achieve—and I would add, much more
efficiently. But even more significantly, NDC [the IATA New Distribution Capability standard] sets us all on a
course to far greater transparency and granularity in the marketing of air transportation than DOT could
even imagine today.”
Tyler added, “The industry not only respects regulation, it depends on it. But more is not necessarily better,
and that is particularly the case when it risks undoing the benefits of market liberalization and innovation.”
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