IATA Code Is Still Pending

<B>IATA Code Is Still Pending</B>

By David Jonas

Despite International Air Transport Association claims of confidentiality, the travel manager community at large remains confused, suspicious and, in some cases, downright opposed to IATA's corporate client identification service. The U.S. Department of Transportation, which had given the IATA measure the green light last month, recently nullified its initial approval, adding that a new order addressing all submitted concerns--notably from the travel agency community and numerous large corporations--will be available "soon." IATA had planned to launch the program June 1, but has not yet declared it effective as it awaits DOT's decision and reviews by other governments.

The voluntary program, which assigns an alphanumeric code for each participating corporation, is meant to facilitate tracking of corporate travel in all markets around the world and possibly across all available channels. Universal and consistent tracking could provide increased efficiencies as corporate travel programs embark on global consolidation.

Nevertheless, travel managers and some industry entities oppose the client ID code, fearful that airlines would have access to corporate data in circumstances where they otherwise would not and should not. Feedback in the form of letters in opposition consequently prompted DOT to further review the program.

However, IATA said "it is important to note that airlines only get data for their own company--they do not see the data pertaining to the other subscribing airlines."

In fact, Delta Air Lines, a proponent of the initiative, said confidentiality was a prerequisite for its support. "When the program was first proposed, it would have allowed carriers to see all the corporate data, not just the transactions that pertained to them individually," said Steve Scheper, Delta's director of agency and corporate programs. "We were against that and said we would not participate unless it was changed. So much like ARC sales in the agency environment, Delta can see its own data but not others.' "

However, some airlines, including TWA and United have stated opposition. For its part, Southwest, with its domestic-only operation, said it did not recognize the benefit. "It seems as if we already developed our own tracking tool for corporations," said Mark Erickson, the carrier's national accounts manager, referring to SWABIZ (see story, page 1).

Many concerned parties are not comfortable with what the participating airlines will do with the data once it is received. "Confidentiality is not guaranteed," said Larry Austin, chairman of Austin Travel, in his opposition letter to DOT. "There is nothing prohibiting airlines from sharing the data with their alliance partners once they have it."

Interestingly, IATA is promoting the global code as a benefit to airline alliances that would otherwise have to invest time and money in developing their own integrated tracking systems. IATA noted that alliance partners may share data only when given permission by the corporate client or covered by antitrust immunization. "Even lacking immunity, each alliance carrier can have individual corporate programs but use the IATA code as a common thread," Scheper said, adding that SkyTeam--the new global alliance anchored by Delta and Air France--would benefit from synergies generated by common coding.

However, the mere mention of airlines sharing that data--even if they are partners--has many buyers crying foul (BTN, June 12).

"An alliance can construct a profile of a company--by an individual traveler's name--without the company's permission and knowledge, bypassing the company-mandated airline vendor," said a European airline source familiar with the IATA initiative and speaking on the condition of anonymity. "In doing so, data loses its confidentiality and breaks U.S. antitrust laws and European Commission privacy laws."

There also has been confusion as to which data actually is included. In response, IATA stated that the code "will not provide any additional information that is not currently available through traditional data sources" and that the data "is not to be combined into products such as MIDT and BIDT because this would compromise the confidentiality of the data for all corporations." That all the data currently are available from other sources is a fact that has critics questioning the justification for the program.

Furthermore, travel managers voiced concern to Business Travel News over the voluntary nature of the program, speculating that participating carriers could insist corporations use the identifier code or risk either a less desirable deal or no deal at all. To that point, IATA said, "Every corporate agreement with an individual airline may have terms and conditions relative to the contract that include the ability for that airline to identify and track that corporation's travel performance. Subscribing airlines may simply substitute their current identification code schemes with the corporation's IATA corporate client identification number."

For its part, Delta insisted that share for discount arrangements will remain the basis of corporate deals. However, Scheper acknowledged that corporations using the latest technology, such as a consistent tracking mechanism, "would provide the best platform for win-win arrangements."

The anonymous European airline source said the code already is less than voluntary in some instances and that two carriers already have included it as a condition for deals.

Austin also responded to IATA's claim that the program will be completely voluntary, stating that companies will be "compelled" to participate or "be threatened with the loss of their deals by the airlines or IATA."

DOT is not the only governing body examining the client code. Both the European Commission and the Australian anticompetition board reportedly are reviewing the issue. IATA said once approval is granted by all governments, the program will launch "as soon as its practical." Should DOT ultimately reject the coding scheme, IATA said it would back off and leave it up to the member airlines to pursue the program.