DOT Finally Proposes Ancillary Fee Requirements, Might Exclude GDSs

The U.S. Department of Transportation on Wednesday finally proposed a long-awaited rulemaking that, among other proposals, would govern the display of ancillary fees in various sales channels.

Yet, for that specific potential requirement__which, like other rules proposed Wednesday, now is subject to a 90-day public comment period__DOT offered two alternative proposals, one of which would exclude global distribution systems from the new ancillary fee requirements, and another that would include them.

For both scenarios, DOT proposed to require that airlines disclose fee information for "basic ancillary services to all ticket agents to which a carrier provides its fare information."

In its definition of "basic ancillary services," DOT included "first checked bag, second checked bag, one carry-on item and advance seat selection, to the extent these options are offered by the carrier."

Furthermore, DOT also proposed to require that "all ticket agents and airlines that provide fare information to consumers to also provide fee information for basic ancillary services to consumers," according to the notice of proposed rulemaking. "This information should be made available to the consumer at the point in which fares are being compared."

Regarding such ancillaries, DOT's proposal would "not require a carrier to allow ticket agents to sell these services; or if a carrier permits ticket agents to sell those services, it would not require carriers to charge the same fee for the service as the agents," according to the proposed rules.

"If a carrier is not selling the service through a ticket agent, the carrier and ticket agent are responsible for disclosing to consumers when and how fees should be paid, and for baggage fees, must honor the fee quoted at the time of purchase."

DOT is soliciting public feedback as to how ancillary fee disclosures should occur, and whether they should be "disclosed only upon the consumer's request" or "provided in the first screen that displays the results of a search performed by a consumer."

Those deliberations should foster intense industry debate.

Still, it is unclear to what extent the disclosure rules would ultimately apply to corporate travel agencies, as DOT plans to assess during the public comment period whether its ancillary fee requirements should apply "only to agent and carrier website displays marketed to members of the general public, or whether the disclosure requirement should include agent and carrier website displays that are not publicly available (e.g., displays used by corporate travel agents)."

Among other proposals released Wednesday, DOT also clarified its definition and interpretation of "ticket agent," which officially would include GDSs, "websites with flight metasearch engines, and similar intermediaries in the sale of air transportation, if the intermediary is compensated in connection with the sale of air transportation."

DOT's proposed rules also would place additional requirements on "large" ticket agents, defined as those with at least $100 million in annual revenue.

Among "certain customer service commitments" DOT would impose on large operators is a requirement to "provide prompt refunds where ticket refunds are due, including fees for optional services that consumers purchased from them but were not able to use due to flight cancellation or oversale situation."

DOT also proposed large agents "provide an option to hold a reservation at the quoted fare without payment, or to cancel without penalty, for 24 hours."

Large agents also would be required to disclose "cancellation policies, seating configurations and lavatory availability on flights," and alert customers "in a timely manner of itinerary changes."

Those agencies may also be required, if the proposals are adopted, to "maintain and display lists of carriers whose tickets they market and sell." If adopted, DOT suggested it would give clarity on "if required, how to disclose the carriers that are marketed and sold by the ticket agent."

Today's rulemaking also formalizes DOT's prohibition against "undisclosed biasing by carriers and ticket agents" in any online fare display that compares multiple airlines. The new bias rule would extend to corporate agencies unless a corporate client "agrees by contract to biases in the display used by its employees for business travel."

As part of a previous batch of consumer protection rules, DOT in 2011 deferred its decision on whether to require airlines make optional services fee data available through global distribution systems.

Delayed for years, most recently due to a protracted review from the Office of Management and Budget, the rulemaking appeared to be taking shape in the past month as DOT modified some language in a recent monthly rulemaking status report.

Other proposals unveiled Wednesday apply less directly to travel agencies and distributors, as DOT also proposed new codeshare disclosure requirements and sought comment on a plan to expand the number of airlines that submit select data to the government.