United Airlines is collecting lots of data about passengers and so are the other airlines? Why do they need to scour credit reports and other data to sell me a ticket? A blogger takes a look at irrational airline change fees. Expedia and Travelocity join forces … kinda.
What United Airlines knows about you and what they don’t want to know
Airlines are collecting more and more information about their passengers, not for security reasons, but for marketing, and if the new IATA ticketing scheme proceeds, perhaps for personalized airfares. United Airlines, according to Forbes, is one of the leaders in this aggregating of data.
By combining the information they know about where you travel with outside commercial data from data brokers such as Acxiom or Experian, airlines today have more intimate insights on their travelers than ever before.
Of the U.S. carriers, United says it has built the largest travel loyalty program with 90 million members. It sends out hundreds of millions of offers a year by mail and email. I wondered if United also shares my information with other companies, so I looked up their privacy policy. I was a bit surprised that the language suggested they could widely share the data.
“United may process your information or combine it with other information that we have about you or that is publicly available,” the airline writes. “In addition, United may share this information with third parties for the purpose of providing you with services, information or promotional opportunities that may be of interest to you.” What this means is they take the information you provide and combine it with personal information from sources such as data brokers to gain a broader picture of you as a consumer. Then, at least according to the privacy policy, they could sell the information to other marketers based on the overall picture they have drawn.
Why does Delta’s Change Fee Schedule make no sense? (Ask Cranky)
Cranky and I don’t always agree about the passenger experience, but in this case we certainly do. Change fees are out of control and their increase last March was one of the featured issues mentioned by the Department of Justice (DOJ) when it decided to sue against the merger of AA and USAir. Here’s Cranky’s take.
The airlines’ naked greed when legacy carriers raised change fees from $150 to $200 took DOJ back and brought fees into the merger equation, just as airfares have long been. Now, airlines are crying, “Foul!”
First, let’s tackle the advance change fee. This is really just due to unimaginative policy creation. It used to be that the cheapest tickets in a market were non-refundable and non-changeable. The only way out of that rule was to get a doctor’s note or something like that, showing that you couldn’t travel. As you can imagine, that was ripe for abuse and people hated the policy. A change was made that allowed people to change their cheap tickets for a small fee.
That worked, but the fee kept growing, and growing, and growing. And this year we saw the big guys all settle around a $200 fee. Alaska, seemingly a more enlightened carrier, decided to break ranks and create a fee structure that actually makes sense to travelers. It raised its change fee from $75 to $125 if the change was made within 60 days of travel, but it eliminated the fee on changes made further in advance because there is less risk of lost revenue for changes that far out.
Expedia to provide technology to power Travelocity’s North American websites
These two leaders in the online travel world have agreed to work together on a technology platform and still market themselves separately. I’m not certain what this will mean for travelers; it probably will mean that searches performed on each site will mirror each other for the most part. So, if you were used to comparing Travelocity airfares and hotels with Expedia’s, don’t bother — compare one of these with Orbitz or Priceline.
The two companies expect to implement the arrangement in 2014. At that point, Travelocity will focus its efforts on promoting its brand and marketing “the broad offering of travel services and supply made available through this agreement.”
Travelocity will have access to Expedia Inc.’s supply and customer services.
Travelocity will be compensated through a performance-based marketing fee related to bookings powered by Expedia made through Travelocity-branded websites in the U.S. and Canada.
Travelocity will remain wholly owned by Sabre Holdings Corp. and will be independent of Expedia.
The parties have also agreed to certain exit rights which, if exercised, could result in the acquisition of certain assets relating to Travelocity’s business by Expedia at a later date, according to a filing with the Securities and Exchange Commission by Expedia Inc.
Both parties plan to begin development and implementation immediately, with an expected launch in 2014.
Illustration courtesy of CEEDS Project
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
