TRAVEL
03/19/2013 08:51 am ET Updated Jun 18, 2013

Why A Plane Ticket Purchasing Technology Has The Travel Industry Up In Arms

Booking trips on Kayak and Expedia is easy but far from transparent. Though the search function on those sites allows savvy travelers to trawl for deals, the sites can't currently offer specific information about or sell appealing extras like additional leg room or in-flight wifi. This is because these sites, like travel agents, rely on a decades-old technology called Global Distribution Services to get their information. Now the world's largest travel organization is saying it is time to modernize the industry and supply travelers with more options.

Earlier this month the International Air Transport Association, a trade group representing some 240 airlines, filed an application with the Department of Transportation for a more advanced global airfare-booking system that would allow for information about extras to trickle down to actual consumers. "New Distribution Capability," the technology that would replace the current system, has industry experts up in arms.

Some claim the system represents progress while many fear that the progress will allow airlines to crank up their prices.

"NDC will enable travel agents and travelers to comparison shop knowing that they have access to the full value of an airline’s complete product offer, not just the base fare," IATA Director Tony Tyler explained in a press release. "I also want to be very clear. NDC will not require passengers to transmit any more information than they do today on airline websites or third party travel sites in order to get an offer."

Tyler's clarity was likely a reaction to the idea that airlines would use any and all personal information given out by passengers to manipulate prices, eking the last cent out of travelers pockets. In fact, several groups including the Business Travel Coalition, a consumer watchdog that quickly accused IATA of anti-competitive behavior, decried the NDC as scheme between competitive companies to maximize profit.

"The goal for NDC is to terminate, by agreement among horizontal competitors, the current transparent model for the pricing of tickets, where fares are published and publicly available for comparison-shopping and purchase," BTC President Kevin Mitchell wrote in a press release responding to IATA's press release. "To accomplish this goal, airlines would demand consumers’ personal data and put their privacy, security and mobility at risk."

If this all sounds a bit inside baseball, that's because it is. Unfortunately for consumers these opaque fights about ticket price transparency determine how much they wind up paying to get from Edmonton to Albuquerque. The reason this fight is more important than previous lawsuits is that the NDC would become the actual service through which many if not most trips were booked. If it the system mandates that consumers give away a boatload of informations -- name, age, nationality, trip purpose, travel history, marital status -- it will likely prove more helpful for airlines than consumers.

Given that sites like Kayak already up prices when consumers navigate away from and back to certain ticket offers, the notion that the NDC might help harness data to drive up prices seems quite possible. As an editorial in the New York Times put it, "the new pricing model comes at a particularly worrisome time, with mergers among airlines already reducing competition and pushing up fares."

The fight over the NDC represents a battle between a struggling industry and its long suffering consumers. Travelers will be affected no matter who wins. Data is the new weapon in the battle over the not-so-friendly skies.

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