Are ‘custom’ airfares good for travelers?
Airlines want to base your ticket price on who you are and where you live, but some consumers are squawking.
Tribune Media Services
Should your airline be allowed to offer you a customized ticket?
That’s the intriguing and somewhat thorny question being raised by the worldwide airline industry through a little-known proposal called Resolution 787 — not to be confused with Boeing’s troubled 787 aircraft.
And it hopes that the answer is “yes.”
The airline industry, represented by the International Air Transport Association (IATA), wants to establish a new standard for selling airline seats, called the New Distribution Capability (NDC).
Resolution 787 would, among other things, allow an airline to collect personal information such as your address, birthday and frequent-flier information and offer you a special or custom fare based on what it knows about you.
Airlines see Resolution 787 as a necessary evolution of their airfares. But consumer advocates warn that such a system might be used to extract more money from passengers and limit their ability to find the best airline ticket by comparison-shopping. For its part, the Department of Transportation, which is being asked to approve the resolution, is staying mum on custom fares.
As far as the airline industry is concerned, fears that it would exploit the customization option are overblown. Resolution 787 simply sets new, much-needed standards that would allow travelers to see more options when they book an airline ticket, according to IATA.
“Consumers who buy directly from airline websites have access to more options to customize their travel than those who buy through travel agents,” says Perry Flint, an IATA spokesman. “The NDC will close this gap.”
Critics claim that it will do more than just add new functionality to a few websites. They say that it makes comparison-shopping almost impossible, especially if airlines don’t release fare information to third parties such as online travel agents, who could offer the ability to compare airfares.
“With NDC, we will have moved from a world where fares were transparent and consumers anonymous to a world where consumers are transparent and fares are anonymous,” says Kevin Mitchell, one of the most vocal opponents of the proposed standards. Mitchell runs the Business Travel Coalition, which represents the interests of corporate travelers.
Based on his review of previous industry association meetings on the subject, Mitchell believes that airline carriers implementing the new standards would probably not file fares and schedules for passengers to use to comparison-shop. “Consumers would no longer see all the options in a market, but rather only those fares the carriers would want them to see,” he says.
IATA’s Flint disputes that claim. “In an NDC environment, air travelers will be able to compare and contrast the full value of the airline’s offer, not just the base fare,” he says.
The airline industry, which first proposed the standards in October, has asked the Transportation Department to approve the new fare system. A DOT spokesman confirmed that the agency has received an application from the IATA but declined to say whether it might greenlight the NDC or whether it has any authority to do so.
If you find all this confusing, you’re hardly alone.
After I showed David Valade, an information systems manager from Melrose, Mass., the text of the IATA resolution, he said, “To tell you the truth, I don’t know what this really means.” Not that it matters. Today’s airfares don’t make any sense either, “nor are they fair,” he added.
That’s an assessment other travelers agree with.
“I can’t imagine how anyone would be willing to accept a personalized airfare,” says Nora Graves, a computer programmer based in Purcellville, a Virginia town in one of the most affluent counties in the United States. “I can picture the scenario now: Log in with your account that provides name and address. Look at the ZIP code. Oh, look! She lives in one of the wealthiest counties in the United States! Hike those fares by 50 percent!”
Her fears are echoed by David Miller, president of Imperial Travel Consultants in Cote Saint-Luc, Quebec. Miller’s travel agency caters to a number of corporate travelers who fly business class when they’re working, “but when they travel for personal reasons, they insist on the cheapest fares available in economy,” he says. He’s afraid that if Resolution 787 becomes a reality, these high-flyers will be punished for their erratic spending patterns, because the customization will offer them only a more expensive fare.
But not everyone thinks that these changes will be bad for air travelers. When I asked Erin Contour, a systems engineer from San Diego, Calif., for her reaction to Resolution 787, she said that she wouldn’t object to personalization as long as she could compare one airfare with another — in other words, that she could see what one airline was offering, as well as all the “extras” she wants to include in the ticket, and compare it with a competitor’s fare.
“I like paying only for what I want,” she says. “I have more of a problem with airline customer service and the general process of flying than I do with the pricing.”
The way you buy an airline ticket won’t change for the foreseeable future. Resolution 787 isn’t expected to be partially implemented until 2015 at the earliest, assuming that the DOT signs off on the new standards and that pilot programs and software developments go well. And that’s by no means a certainty.
Between now and then, there will be plenty of opportunities for air travelers, travel agents and consumer advocates to raise more objections to custom airfares and ask regulators and lawmakers to ensure that Resolution 787 doesn’t have the same difficult launch as the aircraft with which it shares a name.
Christopher Elliott is co-founder of the Consumer Travel Alliance, a nonprofit organization that advocates for travelers. Read more tips on his blog, elliott.org, or email him at email@example.com.