Are Consumers Really Expected to Embrace this Kind of Progress?

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By Catharine Hamm, Los Angeles Times

October 7, 2012, 8:00 a.m.

If you book an airline ticket through an online site or go to a travel agent, you get the ticket price and, thanks to recent U.S. Department of Transportation rulings, that price includes taxes and fees. What you don't get — at least, not yet — is a price that includes ancillary fees (baggage, early boarding, seat choices), but consumer advocates are working toward that. But the changes in store for ticket booking may be even greater. Booking could be the all-new Mr. Toad's Wild Ride. Or not.

The International Air Transport Assn., based in Montreal, is working on what it calls a "new distribution capability" for global distribution systems, which deliver airline ticket prices and schedules, whether you're a consumer using an online engine or a travel agent doing a search for a client. If your eyes glaze over at that sentence, grab some coffee because the results of this change will be anything but dull.

Under the new model, you'll see the price of your ticket as well as other things too — a sort of Amazon.com shopping experience — "a lot of new things around merchandising," said Eric Leopold, director passenger (yes, that's his title) of the international transport group. The new system "will really show the value of the products so you're not just selling seats; you're selling a whole experience to the passenger," he said, referring to those things that are often covered by ancillary fees such as upgrades.

Leopold likened the experience to supermarket shopping. Some consumers "will buy what is on the bottom [shelf at the] lowest price," he said. "Some will buy in the middle shelves," which may cost more but may be a better value.

What IATA calls a "new distribution capability," however, the American Society of Travel Agents is calling "authenticated shopping," which means you tell a little about yourself (maybe your frequent-flier number or your ZIP Code) and you are offered products that are tailored for you, such as lounge passes and preferred seating. These bundled, or one-price offerings, may be based on your previous travel habits and purchases (Do you upgrade? Do you spend time in the executive lounge?) or your economic status (Do you live in a ZIP Code that's "price sensitive"?) or other factors you may not be aware of.

That's an issue for the national travel agents organization, said Paul Ruden, senior vice president for legal and industry affairs for ASTA. "The concern is with how you do business … in an environment where airlines are able to price discriminate, for example, based on your identity," he said.

IATA says it isn't using this proposed system to inflate consumers' costs by foisting off pricier offerings on certain demographic groups. Ruden, who has worked with the Department of Transportation to try to get price transparency for airline pricing — not only fees and taxes but also ancillary fees — is not so sure.

In August, the Wall Street Journal reported that online travel agency Orbitz showed different and more expensive hotel options to Mac users, who presumably represent a wealthier demographic. "The Orbitz effort, which is in its early stages, demonstrates how tracking people's online activities can use even seemingly innocuous information — in this case, the fact that customers are visiting Orbitz.com from a Mac — to start predicting their tastes and spending habits," reporter Dana Mattioli wrote in a story that refers to the practice as "predictive analytics."