The U.S. Department of Transportation wrote a "display bias" letter to major global distribution systems and online travel agencies, warning them "not to engage in undisclosed display bias."
Without naming names, it's clear that Sabre's decision to bias American Airlines' flights in the GDS in early January 2011 and Expedia's similar action on its websites in December 2010, before removing American's flights altogether in a contract dispute the next month, prompted the letter.
Reading between the lines, Travelport's decision to include an American Airlines surcharge in base fares in GDS screen displays outside the U.S. also raised eyebrows at the DOT.
With Sabre reversing course and normalizing American Airlines' displays in late January and American's flights gone from most Expedia websites altogether, Travelport is the only player known to be taking any actions that would lower American Airlines' flight displays.
Travelport currently is adding an American Airlines surcharge to the base fare in GDS displays, making the airline's flights descend in GDS screens, but Travelport is doing so outside of the U.S. only. Travelport, which declined to comment on the DOT letter, likely would argue that it is not biasing American's flights, but is merely representing the true flight cost given the airline's surcharges to travel agencies.
However, the DOT letter stands as a warning about future actions by GDSs and OTAs, although it leaves a lot of wriggle room.
Recipients of the Feb. 1, 2011, letter from Samuel Podberesky, DOT assistant general counsel for aviation enforcement and proceedings, include Travelport, Amadeus North America, Sabre, Travelocity, Orbitz, Expedia and the Interactive Travel Services Association, a DOT spokesperson says.
With the GDS industry a largely deregulated one in the U.S., the DOT acknowledges in the letter that it has no authority to "prescribe how a system must display airline services or require any OTA or GDS to provide fare and schedule information or sell tickets for all air carriers or any particular air carrier."
However, the DOT says it does have an enforcement role in the fact that "the Department has the authority to prohibit OTAs and GDSs from presenting their displays in an unfair and deceptive manner, including by biasing their displays."
The DOT cites Sabre Inc. v. Department of Transportation (Nov. 22, 2005) as the basis for the department's authority on unfair and deceptive displays.
The DOT says GDSs and OTAs would violate unfair and deceptive practice prohibitions in flight displays if they bias displays without "clearly and conspicuously disclosing that fact."
In other words, the DOT apparently will not get involved in GDS and OTA airfare display bias enforcement if they transparently provide notice about their practices.
A GDS and OTA can bias displays as long as they provide a "prominent notice on each screen" that the display is not neutral, the DOT letter says.
"A general notice from a GDS to travel agents using its system by email or letter would not, by itself, be sufficient notice to avoid consumer harm," the DOT letter says. "The publication of inaccurate carrier fare or schedule information is never permitted."
The DOT reference to the inadequacy of only a GDS email or letter to travel agents informing them about display bias actions may have been a reference to Sabre -- although Sabre wasn't specifically cited -- since Sabre informed travel agency customers about its actions against American Airlines in an email and apparently didn't provide notice of its bias actions on each GDS screen.
"By this letter, we caution OTAs and GDSs not to engage in undisclosed display bias," the DOT letter concludes. "We will continue to monitor OTA and GDS practices in this area and will, if warranted, take enforcement action to ensure consumers are not provided deceptive information."
The DOT letter is a rebuke to GDSs and OTAs, who have battled against American Airlines' direct-connect initiative on transparency grounds.
The letter chided at least one OTA [presumably Expedia] and "certain GDSs" [likely Sabre and Travelport] on the transparency issue.
The DOT noted that in light of "various business disputes in recent months, at least one OTA may have intentionally biased or distorted the airfare and schedule information of at least one airline that is displayed to consumers on the OTA's website so as not to accurately reflect that information or accurately reflect that information compared with that of other carriers. Additionally, we understand that certain GDSs may have biased or distorted the information displayed to travel agents in a similar manner."
The DOT refers to "GDSs" -- plural -- and states in a footnote that it "does not generally take enforcement action in connection with displays presented by GDSs and OTAs only outside the United States."
The footnote likely is directed at Travelport GDS, which owns Galileo and Worldspan, and took actions against American Airlines outside the U.S. only.
Sabre, which also owns Travelocity, reacted to the DOT letter, saying it welcomed the DOT's guidance on the issues.
“We welcome the U.S. Department of Transportation’s guidance on the important topic of air travel pricing transparency," said Sabre spokeswoman Nancy St. Pierre. "We are in full compliance with all federal regulations, and our recent actions have been well within all boundaries set forth both by DOT in its recent letter. Sabre will continue to work with all stakeholders in the industry to advocate for transparency and fair competition throughout the air travel system.”
Orbitz, which didn't bias American Airlines flights even though the two parties engaged in a heated contract dispute, had a different spin on the transparency issue.
“One of the well known reasons consumers shop and book flights with Orbitz is because we do not bias our search results," said Brian Hoyt, Orbitz spokesman.
Travelocity, Travelport, ITSA and American Airlines declined to comment on the DOT letter.
Amadeus and Expedia couldn't immediately be reached for comment.
The DOT letter might be fodder for American Airlines as it attempts to negotiate GDS deals in 2011.
The GDSs and OTAs would still be free to bias flight displays -- as long as they provide prominent disclosure -- but clearly the DOT is not enamored with the practice.