Thomas Gregorson is ATPCO's chief strategy officer. He has worked with ATPCO since 1996.
In late April, the U.S. Department of Transportation issued new online shopping regulations requiring airlines to display certain ancillary fee data in the first results page after someone has searched for flights. While airlines are suing the DOT on the grounds that the regulations exceed DOT's legal authority, the airlines, along with their trade groups Airlines for America and the International Air Transport Association, also express concern that consumers will be "inundated with information." The airlines fear that the displays mandated by the new regulations will make it more difficult for consumers to search for flights. One thing is certain: the actual work required to make the mandated changes will be multifaceted and complex.
ATPCO is a 59-year-old company that for decades has been helping the airlines get their fares and rules to market, and while we aren't here to discuss the legal merits of either case, we do have nearly six decades of expertise in the complexities of fare, rule and ancillary data.
Crunched For Time
The DOT requires airlines to make their ancillary fee information available to shopping systems by October 2024. While the change may seem like a minor update to the user experience design of an airline's website and to third-party distribution channels, there are a lot of details that must be addressed before the change can be made.
In updating their displays, the airlines first must consider the change to the user experience. The consumer's point of view is paramount. The first results page is the most important part of anyone's flight search. The airlines test engagement, speed to sale and many other elements to see how they can make the shopping experience as intuitive and seamless as possible for their customers. Adding ancillary fees to the "time of first search" adds more information that must be presented on that critical results page. This mandate has consequences.
First, adding information might require a page redesign. The number of results that fit on the page may be reduced. Airlines may take other information off the page. Flight shoppers may be confused or need to scroll through to additional pages to see the information that is most important to them, such as flight times.
Second, calculating and displaying baggage, change and cancellation fees is not an instantaneous task at the time of first search. Today, technology providers must filter and process through billions of data records to provide a priced itinerary to display the search results to the consumer and provide results in milliseconds. The more complex the flight search, such as including multiple airlines, the more complex the calculation. As complexity increases, the pages load more slowly and degrade the user experience. If calculations rely on data that is simply too slow to load, airlines and their channels may choose to leave certain results out altogether, giving consumers fewer options. The DOT's mandate will require airlines and pricing systems to make tradeoffs in the results they present to consumers.
Lastly, not all channels and airlines have access to all the data indicating eligibility for certain ancillary rates or offers. Customers might have loyalty status with one or more airlines, hold an airline-branded credit card or have points that allow the customer to take advantage of special discounts. All of that must be calculated and displayed accurately. How is a third-party booking tool in the initial flight search supposed to know what perks a customer can access to determine if a first checked bag is free for them, but the fee is paid by someone in a different loyalty or credit card tier? Today, we don't have answers to these questions. Many problems and complexities must be thought through, coded and implemented before consumers will see accurate data at the point of sale.
Time To Get the Changes Right
Depending on how the courts rule, airlines may face deadlines to make these changes soon. Based on our review of the data and technological changes needed, the undertaking is significant and the timeline ambitious.
The tight timeline, unfortunately, doesn't give airlines the ability to consider the customer experience. There isn't sufficient time to test different designs and understand what works best for their flight shoppers. Consumers may get sub-optimal information or results from a search. Airline site performance may suffer, which will only degrade the customer experience.
The timeline also must account for the enormous amount of technical work that goes into the data capture, calculation and display of ancillary fees. Billions of data points need to be pulled from disparate sources, calculated and shared almost instantaneously. The foundational infrastructure is set up to support this today, but that infrastructure must be reworked to support the ruling as it currently stands. In our experience, having to build very quickly tends to result in suboptimal, unstable solutions that may not scale. Airlines that currently don't file the specific data points required by this ruling with industry organizations, such as ATPCO, will not have enough time to input the data into systems, which takes considerable commercial effort.
Considering Next Steps
Airlines have done an incredible job building world-class flight shopping experiences that account for massive complexity. They need to calculate flight prices, manage real-time flight status updates, disclose fees and calculate taxes—all with different parameters and data from their own business, partner airlines, local, regional and global government organizations and more. Few other shopping experiences are as regulated or as complicated as flight shopping.
ATPCO is actively working with the industry and doing all we can to help the industry comply. We have examined the airline data, processing rules, NDC schemas and our presentation services (Universal Ticket Attributes) to identify gaps that would prevent the industry from meeting the October 2024 date for distributing the information. We will work with the industry on all three challenges. This cannot be achieved alone. We are working closely with IATA, and an ATPCO industry design team consisting of airlines and pricing systems is working through these challenges so the industry can try to be ready. If the ancillary ruling does hold, the industry will need to work together to do the best job possible, so consumers receive the best user experience possible.