Skift Take

The organization representing Amadeus and Booking.com says the new rules, as written, could leading to costlier operations for their members and travelers.

New federal rules around airline junk fees and refunds are meant to protect consumers but they overlook the logistics of making it happen, according to Laura Chadwick, president and CEO of the Travel Technology Association.

Among the association’s members are the three major global distribution systems: Amadeus, Sabre, and Travelport; consumer online travel companies Booking Holdings, Expedia Group, and Skyscanner; and corporate travel agencies Amex GBT and BCD Travel.

“What has happened here is that the Department [of Transportation] — in their efforts to get transparency to consumers — have placed a liability on our member companies and all ticket agents of all sizes, but have not provided us the tools to comply,” Chadwick said. 

Junk Fees

Airlines share information about schedules and fares with global distribution systems, and then travel sellers — like Booking.com — can share it with consumers trying to book flights. 

But the airlines aren’t required to share information about fees – say, for luggage or changing tickets – to those global distribution systems.

“The consumer-facing ticket agents rely on those intermediaries to get the information,” Chadwick said. “That is a fundamental characteristic of the travel distribution industry and one that we feel that the department failed to heed in the issuance of this final rule.” 

Chadwick fears the lack of data could lead to inaccuracies and cause confusion when purchasing tickets on third-party sites. 

The Department of Transportation said in the rule that it did not want to interfere with business relationships between airlines and GDSs — and airline representatives agreed. 

“But that ignores the fact that global distribution systems do negotiate with airlines and have been trying over the last 10 years to secure ancillary fee data,” Chadwick said. “And some airlines refuse to give it over.”

Airlines have six months to start sharing data. Agencies have up to two years, depending on their size, to set up systems for displaying that data.

“Had the department given us the tools to comply, this could have happened within months, but they are setting a two-year timetable for this to happen,” she said. “Consumers deserve transparency right now.”

Refunds

The new rule also says airlines need to provide refunds automatically within seven days in instances where flights are significantly delayed or canceled, checked baggage is delayed, and when purchased ancillary services are not provided. 

The rule is the same for travel agents when they are considered the merchant of record, though this typically only applies when an agent is selling a vacation package, she said, not usually for a sale of a single flight. 

The problem, Chadwick said: Though the airline is required to inform the agent that a traveler is eligible for the refund, it does not specify when the airline needs to reimburse the agent. 

That means the agent may have to front the cost as they wait for reimbursement from airlines, and that could be especially harmful to small travel agencies. 

“In a massive refund situation, that would leave us having to lay out the refunds for consumers with a hope and a prayer that airlines will make us whole in the end,” Chadwick said.

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Tags: global distribution systems, joe biden, junk fees, the prompt, travel technology

Photo credit: The Travel Technology Association wants changes to the new airline rules about junk fees and refunds. Pixabay

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