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Feds' Data Plan Irks Some Airlines ; Low-Cost Carriers Cite Higher Costs, Unfair Competition

Posted on: Tuesday, 2 August 2005, 09:00 CDT

Frontier Airlines and its low-cost brethren are up in arms over a proposal to increase the amount of information airlines must report to the government, citing competitive and cost concerns.

Some of the nation's large carriers, including United Airlines and Northwest Airlines, also oppose aspects of the proposal.

The U.S. Department of Transportation, looking to glean more meaningful data about the nation's airline industry, is considering rule changes that would make each carrier submit a host of new sales data on a monthly basis.

Airlines would have to report the price, code and booking restrictions, departure and arrival times and an itemization of the taxes paid for each ticket they sell. They also would have to submit to the DOT how far in advance each passenger booked the ticket, the distribution method used and whether the customer is a member of the airline's frequent-flier program, among other things.

The DOT says the rule changes are necessary because "traffic statistics no longer adequately measure the size, scope and strength of the air travel industry," the agency wrote in its proposal this year.

The data would be used to provide consumers, airlines, government agencies and others with a wealth of information about fares and industry trends.

The proposal "will realign DOT's data collection system to interface with the industry's state-of-the-art information systems," the DOT wrote Monday in response to e-mailed questions by the Rocky Mountain News. "This will enable DOT to improve the quality, availability and usefulness of the data while reducing the burden on the reporting carriers."

But nearly a dozen of the nation's major low-cost airlines, including Denver-based Frontier, Southwest and JetBlue, say the magnitude of the proposed changes will, in fact, make the whole process much more burdensome.

Currently, the DOT requires all carriers to submit a 10 percent random sample of all tickets they sell on a quarterly basis.

The new rules "would require airlines to report data on every fare paid by every passenger on every flight in every market they serve," the discount airlines wrote in a joint response to the DOT last month. "No industry in America is required to submit this level of detail on their sales and operations to the government" or to the public and competitors.

Carriers would have five days after the end of each month to submit the data, as opposed to 45 days after the end of each quarter now.

The changes could be quite costly to implement, as airlines would have to take on new expenses for additional workers and technology.

"Many of the smaller low-fare carriers don't have the systems in place that would allow them to get this type of information easily and quickly," said Ed Faberman, executive director of the Air Carrier Association of America, a lobbying group representing several small airlines, including Frontier.

The smaller carriers also argue that making a slew of airfare information public would blow the lid off the top-secret methods and processes each airline uses to price tickets, enabling larger ones to thwart attempts by low-cost competitors to enter their markets.

United, Denver's largest carrier, opposes the move to increase the amount of information airlines must report but backs the idea of boosting the frequency of the data they must report now.

"We're not opposed to changing it to a monthly basis because then we'd have access to a lot of market data in a more timely manner," United spokesman Jeff Green said.

The DOT said it will consider comments submitted by the carriers. It then could decide to make changes to the proposal, ask for further input or pass it as is.

Transportation Secretary Norman Mineta will issue the final ruling.

INFOBOX

Proposed changes

For each ticket sold, commercial carriers would have to report on a monthly basis:

* Price, flight departure and arrival date and time, itemization of individual taxes paid.

* Airfare code, booking restrictions, service class, master flight number.

* How far in advance the ticket was booked, the distribution channel used to buy the fare and if the passenger is a member of the carrier's frequent-flier or loyalty program.

Ten discount airlines oppose the DOT's proposed rule changes: Air Tran, Alaska, America West, ATA, Frontier, Independence Air, JetBlue, Midwest, Southwest and Spirit.

Source: Rocky Mountain News

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