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.

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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 IATA’s 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 world’s 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 IATA’s 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. IATA’s 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 group’s

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 IATA’s 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.

2 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 world’s 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.

IATA’s 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 IATA’s 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 See discussion in Paragraph C.1. regarding the mandatory requirement.

4 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 IATA’s 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 IATA’s 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, IATA’s

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.

8 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 Japan’s 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)

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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 andprices based on the PNR and passenger information.

Information on the services booked and paid by

customers is integrated into the PNR

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Airline Ancillary Services (ii)

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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 TAs120 x 90 (image)

160 characters max (explanatory text)

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MerchandisingPersonalisation in the GDS

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)

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Airline Ancillary Services

Corporate deals reflected in

� Fares / ancillary services

shown automatically tailored

according to bilateral

agreements between TMC /

corporation

� The example shows Ancillary

Services in Amadeus e-

Travel Management (used by

business travellers to book

their work-related travel)

Exhibit II – IATA document

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