American Airlines on Nov. 21 filed a scathing response to ASTA’s complaint to the Department of Transportation about the carrier’s distribution strategy, calling the complaint “frivolous” and asking the DOT to dismiss it.
ASTA filed its complaint in September because of American’s decision to remove some content from the traditional GDS (Edifact) booking channel, making the lowest fares available only in channels that use New Distribution Capability (NDC) technology.
ASTA said American’s move has harmed travel agencies and consumers, and it requested that the DOT require American to restore all fares in the Edifact channel because the NDC strategy was implemented too quickly.
American, which was required to respond to a docketed complaint, accused ASTA of protecting travel agencies that have not invested in NDC technology, not consumers as the trade group claims.
“Consumers should not be held hostage to old technology by those agencies that are choosing not to make that investment,” American said.
American said NDC “makes it possible for American to offer more options to consumers at lower prices and with better service,” and that American’s success is “driving other U.S. airlines to also adopt NDC-based technologies.”
The airline noted that United has removed basic economy, its lowest-priced fare product, from Edifact and “implemented changes that have resulted in as much as 40% of all sales being fares that are only accessible through its NDC channel.”
“Mysteriously, ASTA seems fine with both of United’s efforts,” American said.
American also claimed that customers prefer NDC-enabled technology.
“Customers who are given more information can select what they value and they understand what they are buying,” American said. “When products align with expectations, customers are inevitably more satisfied.”
American expounded, saying that NDC allows travel agency customers to do what customers can do on AA.com: select and purchase amenities, including checked bags or WiFi, or access bundled upgrade options.
“American has made huge efforts and investment to close this gap, but to consume the full scope of that data, travel agents have to move beyond Edifact to NDC — an XML-based standard designed specifically for data transmission between airlines and travel agents.”
AA said travel agencies in other countries have more readily adopted NDC-enabled technology to book air.
“In 2018, Lufthansa became one of the first airlines to implement an NDC partner program, followed swiftly by British Airways, Iberia and Finnair. Singapore Airlines, Malaysia Airlines, Air France, and Etihad have all announced programs to transition to NDC.”
American added, “A number of travel agencies already use NDC outside the United States but Edifact within the United States. Why they have chosen not to bring the benefits of NDC to U.S. consumers is unclear.”
Addressing ASTA’s beef about competition
Besides objecting to American’s distribution strategy, ASTA in its complaint addressed airline competition, saying that American is too dominant at its hubs and that the airline should be forced to surrender slots to other carriers at capacity-constrained airports to increase competition.
ASTA also said that consolidation in the U.S. airline industry has harmed competition and it characterized global airline alliances as anticompetitive.
American called these allegations “a sham.”
Regarding the hub-and-spoke model, American said, “Put simply, American, Delta and United have a visible presence in certain hubs and city pairs linked to those hubs because they are collecting traffic at those centralized hubs. Contrary to ASTA’s allegations, this is not evidence of dominance but rather investment and competition.”
American also said that the growth of low-cost and ultralow-cost carriers in the U.S. has been good for competition, “resulting in inflation-adjusted airfares reaching their lowest point in history in 2019 even after including ancillary fees, only to fall even further in 2020 and 2021.”
American said the consolidation that occurred in the early 21st century “stabilized bankrupt airlines and led to more investment and growth in a highly competitive industry.”
Regarding slots at crowded airports, American said, “Rather than misdirecting blame at American and other airlines for a government-mandated tool used to limit congestion, ASTA would more appropriately focus on advocating for investment to expand inadequate capacity.”
The airline said international alliances and joint ventures “allow U.S. airlines to market more international destinations with more integrated and efficiently priced products.”
Overall, American said ASTA’s complaint is “a frivolous compilation of rhetoric and unsupported allegations.”
“American continues to be disappointed in ASTA’s ongoing campaign to misrepresent American’s commitment to delivering a modern retailing experience for customers,” an AA spokesperson said Wednesday. “New Distribution Capability is about expanding customer options and improving transparency — goals that are demonstrably good for competition. ASTA does not even try to argue otherwise.”
Source: Read Full Article