Mixed Reactions After U.S. DOT Nixes Fare Display RFI

The original article is available here.

By Ben Goldstein

U.S. carriers were delighted by the U.S. Transportation Department’s (DOT) decision to withdraw its request for information (RFI) into airline fare display practices, but groups representing consumers are crying foul.

The RFI had aimed to address whether airlines should be permitted to withhold their ticket fare, schedule and availability data from online travel agencies (OTA) and metasearch sites like Expedia and Travelocity. Carriers say they shouldn’t be forced to feed data to untrusted third-parties; OTAs accuse airlines of seeking to stifle competition and comparison shopping.

The RFI was originally issued in October 2016, during the final stretch of the Obama administration. The public comment period was delayed once from December 2016 to March 2017, at the urging of Airlines for America (A4A). Despite receiving nearly 60,000 comments, the DOT—under the leadership of the newly installed Trump administration—suspended the RFI indefinitely to “allow the president’s appointees the opportunity to review and consider this action.”

The effort was never taken back up. In late December 2020, the DOT withdrew the RFI, concluding that no market failure was identified that warranted government action. “Airlines should be able to choose how and where they sell their products, so long as they do not engage in unfair or deceptive practices,” the DOT stated in a filing.

Airlines for America (A4A), the main lobbying group for major U.S. airlines, applauded the DOT’s decision to withdraw the RFI, stating that it “confirms the bedrock principle” that airlines—like any other business—have the right to sell and distribute their products as they see fit.

“While many U.S. carriers have arrangements with third-party travel websites, airlines that choose to offer flights directly to their customers should have the flexibility to do so, and the DOT’s decision ensures that they will,” A4A spokesman Carter Yang said in a statement.

Southwest Airlines, which is the only major U.S. carrier that does not share its schedule and fare data with third-party websites, also applauded the decision to withdraw the RFI. The Dallas-based carrier has argued that displaying its fares on OTAs and metasearch sites inserts an unnecessary middleman into the ticket sale process and interferes with its ability to explain its unique fare structure to consumers. By displaying its fares alongside other carriers that also charge a host of ancillary fees, the argument goes, shoppers will be easily misled about which ticket has the best value.

“As most airline consumers know, a base fare on Southwest comes with much more value than our competitors, such as no change fees and no bag fees,” Southwest chief marketing officer Ryan Green said. “We prefer our fares not be listed among other carriers that charge those and other fees.”

Southwest SVP-governmental affairs Jason Van Eaton said the RFI amounted to an effort by internet companies to use the power of the federal government to drive more traffic to their for-profit websites. “Any requirement forcing airlines to sell or display their flight offerings through these less-than-transparent third-party websites would harm both consumers and competition, let alone undermine the sacrosanct American principle of free enterprise,” Van Eaton said.

Proponents of the RFI see things differently. Travel Fairness Now executive director Kurt Ebenhoch, whose group was a strong backer of the RFI, said the move benefits airlines over consumers by denying shoppers convenient access to up-to-date flight and fare data. Ebenhoch said the issue isn’t about where airlines sell their product; on the contrary, all the information being sought by third-party sites is publicly available.

“The facts are that this is about consumer access to publicly available airfare and airline schedules that use public airspace, airports, air traffic control management resources and runways,” Ebenhoch said.

While the RFI’s withdrawal is a victory for airlines, it could prove to be temporary. President-elect Joseph Biden was the U.S. vice president when the effort was kicked off five years ago, and he has vowed to undo many of the eleventh-hour regulatory decisions made by his predecessor. If the incoming Biden administration does seek to revive the fare display effort, it will likely reach a very different conclusion than the Trump administration did.