BEFORE THE U.S.

DEPARTMENT OF TRANSPORTATION

DOCKET NO. OST 2013-0048 ____________________________________

AGREEMENT ADOPTED BY THE INTERNATIONAL AIR TRANSPORT ASSOCIATION AS RESOLUTION 787 ____________________________________ COMMENTS OF AMADEUS IT GROUP SA Amadeus IT Group SA (Amadeus) hereby submits these comments in response to the March 11, 2013 Application of International Air Transport Association for Approval of Resolution 787. A. About Amadeus

Amadeus is a leading provider of advanced technology solutions for the global travel industry. Customer groups include travel providers (e.g., airlines, hotels, rail and ferry operators), travel sellers (travel agencies and websites), and travel buyers (corporations and travel management companies). Amadeus is the largest investor in research and development in Europe in its sector and provides computer reservations services to 440 airlines and IT services to more than 100 airlines around the world.

Amadeus was invited in May 2012 to participate in a meeting held by IATA in July 2012, where it was informed about the New Distribution Capability (NDC) initiative sponsored by IATA. While Amadeus has not been involved in IATAs decision making process, Amadeus has engaged with IATA, airlines, travel agents and other parties to provide constructive feedback on the initiative. Amadeus has expressed, in general, its support for the stated objectives of NDC, such as improving airlines ability to differentiate and merchandise their offer. Amadeus is also supportive of attempts to standardize processes, as discussed below. Indeed, Amadeus has shared its own XML schema with IATA and is increasingly involved in the DDX1 working group. Nevertheless, Amadeus has also pointed out areas where it believes the NDC project faces several challenges. Amadeus therefore offers these comments as an organization committed to helping the airline industry achieve its objectives within the framework of commercial, technical and regulatory realities. As a global computer reservation system and technology provider to the worlds airlines (including a large number of IATA members), Amadeus understands the legitimate interest of any airline in using the newest technology and communications protocols to display their fares and service offerings. Our company is at the forefront of enabling airlines to differentiate their product offering and works with many of its airline customers on XML communications protocols of the very type envisioned in Resolution 787, as well as other technology. These efforts have enabled carriers to offer various ancillary services through the travel agency channel. Currently over 15 carriers in 40 countries sell seat, bag, meal or other ancillary services through the travel agency channel using Amadeus Ancillary Services solution either through ATPCO filing, direct loading in Amadeus or XML-API connections. See a description of the
1

DDX is a working group composed of IATA airlines and IATA Strategic Partners that documents detailed business requirements and develops implementation guidance for data exchange standards in the area of airline distribution. It can provide feedback but it has no decision making power (such power rests with IATAs airlines only).

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ancillary services offered to airlines through this product at http://www.amadeus.com/airlineit/solutions/sol_2stand_8revenues_1services.html The goal of Amadeus efforts is that the travel agency community can display fare/service offerings as robustly and informatively as one might find on certain airline websites. These efforts have been underway over a period of years and are continuing, as evidenced by Amadeus actively contributing to the implementation of EMD (the IATA standard for ticketing ancillary services in both the direct and indirect channel) and the implementation of Amadeus functionalities that meet several of the differentiation requirements of NDC (e.g., attribute display and ancillary services catalogue).2 Exhibit I includes examples of Amadeus current capabilities. B. IATAs Application

Amadeus supports the interest of airlines in exploring different ways to offer their services through the direct or indirect channel. The market is already moving quickly in the direction of the technology and the standardized communications protocols of the type that IATA seeks to promote and that Amadeus supports. For example, inclusive groups such as Open Travel Alliance and airline groups such as Open Axis have already developed new standards for use in distributing airline products and services. IATA has recently chosen the latter groups XML standards for use in NDC. Moreover, as noted above, Amadeus is also at the forefront of developing such technology and communications protocols. Amadeus has studied IATAs March 11 Application. IATA characterizes its Application as a request for approval of an XML schema as an industry standard. Amadeus generally supports the standardization of processes as good for the industry and the public in general.

Unfortunately, not all airlines have been willing to allow CRSs and agencies access to display and sell their ancillary services. That is a commercial decision that many airlines have made and which NDC will not resolve.

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However, for the reasons provided below, Amadeus believes that it is not necessary for the selection or characteristics of a standard that it be embodied in a mandatory IATA resolution3 that binds most of the worlds airlines. Amadeus also believes that it is not warranted for the Department to appear to give its approval to one standard over another. Any IATA agreement on technical XML standards should at most be reflected in a recommended practice and not a binding resolution approved by the Department. Amadeus believes that the market should continue to govern the development of standards here. IATAs request can also be viewed as going beyond formulating common standards and seeking to change the distribution system for the industry. IATA states that DOT should not ignore the aspirations of IATAs NDC described in Resolution 787, which would imply that the request seeks approval for the wider NDC initiative.4 Further, several of the IATA members that have submitted comments to DOT supporting Resolution 787 make clear that they are doing so because they support NDC as a means of restructuring the current distribution model. The documents attached to the IATA Application state unequivocally that the distribution system envisioned under Resolution 787 is considerably different from the existing model where content is pushed to systems (e.g., schedules, fares and availability) and the offer is created without direct involvement of the carriers. See Summary of Changes at 34. Amadeus believes that this view of the existing distribution model is incorrect because airlines today have full control of their content through the indirect channel; therefore the distribution of enhanced content is not precluded by the technological capabilities of the

3 4

See discussion in Paragraph C.1. regarding the mandatory requirement. Particularly in light of the uncertainty over exactly what IATA is asking DOT to bless, the Department should require IATA to produce all relevant documents in IATAs possession regarding the Resolution and NDC.

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current distribution system.5 Despite that, IATA is proposing to impose a model and an architecture which go far beyond pure technical standards and which will substantially change the current distribution system. For example, the IATA document attached as Exhibit II, illustrates that the NDC model contemplates that the flow of information between airline and customer will also be modified to eliminate or at least reduce the utility of the fare filing warehouses (such as ATPCO) in which information available to GDSs and others for providing fare quotations is currently stored and made widely available for comparison shopping. A proposed change in the distribution system such as NDC represents is a matter that the Department should approach with caution. Indeed, numerous parties have raised questions about the potential impacts of the Resolution. Those questions deserve a full airing and careful study by the Department. C. Amadeus Specific Concerns With Resolution 787

Amadeus has identified several specific concerns that warrant DOT consideration. These concerns have in common that they relate to aspects of Resolution 787 that go beyond pure functional or technical requirements necessary to develop and establish an industry standard. C.1. Mandatory requirement

Although IATA has portrayed the Resolution as not being mandatory, a close look shows that the wording expresses a mandate. The fact is that if an airline chooses to distribute enhanced content,6 it must do as the Resolution mandates, that is via IATAs XML schema and the architecture and solution described in the Resolution.7 As IATA acknowledges in its
5

In the current model carriers fully control the fares they load (as frequently as every hour) through ATPCO. They also define their schedule and have tools to dynamically load any schedule change. Finally, they have the capability to completely control the availability provided through GDSs and adjust it based on numerous parameters such as Point of Sale or Frequent Flyer tier level. 6 This concept (like others in the Resolution) is not defined; the term enhanced content implies customized or itemized content. 7 See the second sentence of the opening paragraph of Resolution 787 (Members and/or systems providers shall.).

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filing, the provision of enhanced content by airlines is a global trend. Therefore a significant number (if not all) IATA members will eventually have to follow the Resolution (changing their distribution systems accordingly), even if they would otherwise have chosen to distribute enhanced content in an alternative method, using the current distribution system. As we expressed above, Amadeus is open to the development of standards, but its opinion is that the choice and adoption of standards should be left to the market and not imposed. If the standard is the most suitable, it will be followed by the market. Interestingly, IATAs example in its application (VHS vs. Betamax) illustrates that the choice and adoption of a standard should be left to the market to decide.8 In fact, IATA agrees that the market is already evolving on its own, and it acknowledges that each of the major GDSs has taken steps in the direction of providing new solutions for displaying fares and services. Application at 5. A mandatory standard would preclude the further development of other competing and complementary options existing today, or that that will be developed in the future. The Department should therefore ensure that Resolution 787 is voluntary. Such a condition is needed in view of the terms of the Resolution, which are mandatory with respect to the distribution practices covered i.e., see the opening paragraph of Resolution 787 (Members and/or system providers shall apply the following procedures when distributing enhanced content).9 With a non-mandatory condition, the Department will effectively transform Resolution 787 into a recommended practice.

In the case of VHS vs. Betamax no industry association sought the blessing of a government agency to advance one standard over another. What happened was that Sony asked Japans Ministry of International Trade to support their Betamax standard in the face of a rising challenge from the VHS standard. The government ministry gave their support to the Betamax standard. In the end, however, the market chose VHS. 9 Further, the Resolution should of course not bind non-IATA members such as system providers, an ambiguous term that could include GDSs.

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C.2.

References discouraging backwards compatibility should be removed and

provisions to enable content comparison should be included Efficiency dictates that new standards should be adopted when the market chooses to do so, and that backwards compatibility is necessary to assure a smooth transition (and competition between a non NDC and an NDC system). However the Resolution strongly discourages airlines from providing backwards compatibility, see section 1.2.4, stating that there should be no constraints driven by any requirement for backwards compatibility and indicating that backwards compatibility is justified only if there is a defined business need. These statements may be read as precluding a seamless integration of existing tools and hybrid approaches whereby content comes from NDC or another source for one or several carriers. Transparency, which is both highly valued by consumers and a stated aim in the Resolution, can only be achieved by providing content that can be compared. However, the Resolution does not contemplate how comparison of content between carriers adopting NDC and carriers remaining on current technology could happen. This could lead to loss of transparency for consumers and airlines. Further, the aim to eliminate backwards compatibility does not serve any technical purpose. Instead, it seems to be more a business decision aimed to force the abandonment of the existing system in favor of NDC. Additionally, there is no obvious link between backwards compatibility and the purpose of Resolution 787 to improve the ability of airlines to market enhanced content. For these reasons, references discouraging backwards compatibility in Resolution 787 should be removed and provisions to enable transparent comparison of enhanced content across airlines, irrespective of the connectivity they choose, should be added.

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C.3.

References to content ownership should be removed from the Resolution

Section 1.2.7 of Resolution 787 states: This distribution model assumes that each airline distributing its individual products and services is the owner of its own content. While that statement might seem innocuous, there is a risk that it could create limitations on the usage of data, which currently do not exist, or raise legal concerns like privacy issues. Indeed, several IATA working documents extend the understanding of content ownership to Passenger Name Record (PNR) ownership. This concept of content ownership (including PNR ownership) has no functional or technical justification that would promote the stated objectives of the Resolution.10 It should therefore not be included in an IATA Resolution regarding technical standards. C.4. Resolution 787 raises privacy issues that need to be addressed and

appropriate guidance should be provided Resolution 787 provides that persons seeking an airfare offer during the shopping process shall be asked to supply data to identify who is making the request where an intermediary [e.g., a travel agency] is present and data to identify on whose behalf the request is being made before receiving a customized airfare offer. The data for identifying on whose behalf the request is being made may include items such as age, marital status and nationality. Data supplied by passengers will be retained not only by the airline requesting the data, but would be shared between and among IATA members as per section 3.1.1.2 of the Resolution with due consideration for compliance with government privacy laws. Currently, there are no applicable DOT regulations governing the use of personal data collected by, or shared among, airlines.
10

Notably, while Amadeus today provides XML-API connectivity for carriers such as Easyjet, Transavia and Air Asia, it does so without changing the way PNR data is handled compared with the way it is handled with any other carrier using an EDIFACT connectivity or push model.

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The request for personal information of the sort described in Resolution 787 raises numerous and complex questions about the usage and sharing of such personal information which affect virtually all the stakeholders in the travel distribution chain. Accordingly, appropriate rules and guidance should be adopted. D. Conclusion 1. Amadeus is supportive of improving airlines ability to differentiate and merchandise their offer. 2. Amadeus is supportive of technical XML standards insofar as they are not mandatory (either in their adoption or in their development). 3. Regarding Resolution 787, numerous parties have raised several issues that require study and clarification. In that respect, Amadeus considers that, IATA should be required to change it as follows: a. The Resolution should be entirely non-binding and voluntary. b. References discouraging backwards compatibility should be removed and provisions to enable content comparison should be included. c. References to content ownership should be removed from the Resolution. d. Privacy issues should be clarified.

Respectfully, Amadeus IT Group, S.A.

Svend O. Leirvaag VP Industry Affairs

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Exhibit I Examples of Amadeus current capabilities

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Airline Ancillary Services (i)

Airline Ancillary Services integration in travel agents workflow enables airlines to merchandise their unique service offer with a dynamic catalogue. Integration within booking, pricing and issuance steps make it easy for agents to adopt this new content and upsell airline's services.

A dynamic catalogue shows airlines specific products and prices based on the PNR and passenger information.

Information on the services booked and paid by customers is integrated into the PNR

2012 Amadeus IT Group SA

Airline Ancillary Services (ii)

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2012 Amadeus IT Group SA

Flight Features
Amadeus Flight Features is an excellent marketing tool to provide targeted service information to travel agents and differentiate airlines offering from the competition. Highlight the unique services and travel experience offered with pictures and text at the precise time when travelers choose their airline.
Promote more than schedules & prices. Target advertising based on flight criteria, agent preferences and location to: Differentiate from the competition Increase customer service and loyalty Target selected travel agents in real time or on a worldwide basis Available in: Air Availability pages Graphical low fare search for offline TAs

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2012 Amadeus IT Group SA

120 x 90 (image) 160 characters max (explanatory text)

Merchandising
Personalisation in the GDS Airline Ancillary Services
Pricing according to Frequent Flyer status Ancillary services content & price varies based on passenger type code and frequent flyer tier The example shows Ancillary Services in Amadeus Selling Platform (travel agency booking platform) Corporate deals reflected in Fares / ancillary services shown automatically tailored according to bilateral agreements between TMC / corporation The example shows Ancillary Services in Amadeus eTravel Management (used by business travellers to book their work-related travel)
4

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2012 Amadeus IT Group SA

Exhibit II IATA document

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