Sure, an airplane may feel like a cattle car with wings.
But you may not have to be just one of the herd where airfares are concerned. That’s a scenario airlines are considering — a new way to package and price their products that will be possible when the industry upgrades its reservation system. It’s another way travelers, by sharing information — whether on purpose or by default — will get personalized attention and offers from the travel industry.
Throughout the industry, there’s an increased focus on using Big Data to provide more and more offers and information to travelers.
The airlines have their own move afoot to make more efficient use of passenger data.
The International Air Transport Association (IATA), which represents the airlines’ interests, recently got the OK from the Department of Transportation to upgrade the reservation system, which is based on programs and technology dating to the 1940s, when the Internet wasn’t even a glimmer in anyone’s eye. The new system — it’s just XML, a program long in wide use — will facilitate the way requests and data are shared and fares are calculated.
Most airlines already use XML to present information and prices on their products and services directly to customers on their own websites. It’s the most efficient and cheapest method for providing customers with information about different fare alternatives as well as the ever-widening array of ancillary services — onboard amenities, baggage fees, upgrades, etc. — along with graphics such as pictures or seat maps.
Travel agencies and other third-party airfare sellers have been at the biggest disadvantage, because fare reservation systems didn’t have the capability of linking with the airlines’ system.
So not only are they unable to provide such helpful information for their customers, but at least theoretically the agencies couldn’t earn commissions by selling these add-ons.
The new system will make booking systems more flexible and affordable, and more “transparent” as far as costs and options, the IATA said.
Reasonable and innocuous, right? Why not allow the system to catch up to the 21st century? The DOT agreed, and approved IATA Resolution 787 last August.
But the resolution, which was the result of the IATA’s Passenger Services Conference in 2012, has been met with concern, questions and opposition since it was introduced.
Many of the concerns arose from ambiguities in the proposal and from some of the ideas — later, the IATA termed them “aspirational” goals — for how the new system might be used.
Privacy watchdog groups’ hackles were raised over the potential to make it easier for an airline, travel agent or other seller to share data about its clients.
Crying wolf? Not necessarily. Some of those who have followed Resolution 787 from the beginning have noted the second part of the resolution, involving the New Distribution Capabilities, or NDC. “Capabilities” as in what the airlines and others who are involved in selling airfares — and gathering your information — can effectively do with it.
The NDC makes it clear that the information about you can and would affect airfare prices. Many opponents, including columnist Edward Hasbrouck, an expert in privacy as it relates to travelers, say the ultimate goal of the airlines is to get rid of the current system of published airfares altogether, and “personalize” prices for every buyer.
Hard to imagine? Maybe, but the vision is spelled out in Resolution 787 under Section 1.2.5, Enhanced Airline Distribution.
“126.96.36.199 [EAD will] allow individual carriers to determine [their] own prices and the nature of those products offered, depending on who the requestor is and what they are requesting. This will require authentication and the provision of historical data based on previous transactions;
“188.8.131.52 [will] facilitate the implementation of a ‘shopping basket’ capability concept allowing for the consumer to add or remove items from their basket as they choose. Each of these choices can trigger a “re-pricing” of the offer(s) provided by the airline.”
Right. It’ll be “Let’s Make a Deal” for every traveler, depending on your buying habits/income/history/who-knows-what-else. The more information you offer, the better the deal you can make, according to the IATA.
What’s the information that airfare sellers would be interested in snagging from consumers? The IATA lists specifics in Resolution 787, Section 184.108.40.206.2: Name/Age/ Marital Status, Contact Details, Frequent Flier Number or Profile Number, Customer Type, Travel History, Nationality, Shopping History, Previously Purchased Services.
“All of those attributes, and perhaps others, are elements of data an airline might want, and a shopper might be willing to give, to contribute to a more applicable fare for the specified traveler,” according to the IATA.
Some worry about the definition of “a more applicable fare.”
Hasbrouck gave one scenario: What if, for instance, an airline somehow learns — whether or not you tell it — that you’re desperate to get to your dying mother’s bedside? The airline can make its ticket offer as high as it likes under this proposal.
And what if someone doesn’t want to give out their information at all? The IATA says providing personal data will not be mandatory; then again, in the NDC, the airlines have expressly reserved the right to “decline [no shopping results returned]” to provide any particular “offer” or airfare for any consumer.
The New Distribution Capabilities section, as I mentioned above, remains an aspiration for the future. The DOT approved only part of Resolution 787, requesting a go-ahead to upgrade the reservation system. The DOT also noted, at the time, that:
“Approval of Resolution 787 does not constitute approval of any agreement among IATA member airlines to require the disclosure by any passenger of personal information of any kind.”
Will the New Distribution Capabilities section ever come to pass? Will it benefit travelers in general, or in certain instances?
How it will play out, only the future will tell.