The Beat Letters: ATPCo On Ancillary Air Fees

Re: GDS Execs Agree: Need Standards on Fees

It was refreshing to hear such candid talk from top executives of the three largest global distribution systems, and we couldn't agree more with the statement, "The industry needs technical standards for booking and processing the airlines' unbundled, a la carte, ancillary fees."

The commentary was quite timely (particularly Sabre CEO Sam Gilliland's comment regarding the need for "industry forums") as it was released the same day the Airline Tariff Publishing Co. was hosting an Optional Services Conference in Miami. This two-day event brought together key decision-makers from six global distribution/pricing systems and representatives from major carriers of the Americas, Europe and Asia, with a goal of unifying the industry regarding the adoption of standards for ancillary revenue.

Working in collaboration with both systems and carriers, ATPCo has designed and delivered automated products supporting the marketplace concept of "the total fare." These include industry standard solutions for published and negotiated market fares, automated re-issues and fuel surcharges, with Optional Services as the latest example. Implemented in November of 2008, ATPCo's Optional Services flexible solution sets an industry standard ensuring consistent and accurate collection of ancillary revenue while allowing carriers to fully customize and differentiate their services across sales platforms. In addition, the International Air Transport Association in 2008 designated ATPCo as sole worldwide distributor of sub-codes for optional services, which further guarantees a cohesive industry solution.

Throughout 2008 as we worked toward implementation, it became clear to us that significant barriers to adoption remained. One-off solutions began to appear as carriers looked to rapidly integrate new fees and charges into their systems. However, we agree with Sabre's Gilliland, who said, "[The industry] can waste a lot of time and money working on one-off solutions based on self-interest, or we can cooperate on solutions that will be in our industry's long-term interest."

In our other role as the industry's neutral broker, ATPCo finds itself in an ideal position to bring systems and carriers together in moderated forums that allow all parties to collectively air their concerns and gain a better understanding of the benefits of standardized solutions. In doing this, what we discovered during this recent meeting was 1) systems will implement a standardized Optional Services solution in 2009 and 2) airlines are committed to use an industry solution for optional services. With this meeting of minds, we believe we have acquired sufficient momentum to make the Optional Services standard useful to the industry in the near-term.

~ Bill Andres, CEO of ATPCo