BEFORE THE

DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.

Transparency of Airline Ancillary Fees and Other Docket No. DOTOST20140056

Consumer Protection Issues; Proposed Rule

COMMENTS OF
UNITED AIRLINES, INC.

Communications with respect to this document should be sent to:

Steve Morrissey Thomas Newton Bolling

Vice President-Regulatory Affairs and Vice President and Deputy General
Policy Counsel
UNITED AIRLINES, INC. Abby L. Bried
1225 New York Avenue, NW Associate General Counsel-Regulatory,
Suite 1100 DCAIZ Alliances & International
Washington, DC 20005 James F. Conneely
(202) 521-4400 Counsel-Regulatory
steve.morrissey@united.com UNITED AIRLINES, INC.
233 South Wacker Drive
Mary Barnicle 11th Floor HDQLD
Managing Director, Regulatory Affairs Chicago, IL 60606
UNITED AIRLINES, INC. (872) 825-8068
233 South Wacker Drive (872) 825-7415
11th Floor HDQIZ (872) 825-8311
Chicago, IL 60606 thomas.bolling@united.com
(872) 825-6822 abby.bried@united.com
mary.barnicle@united.com james.conneely@united.com

Robert S. Span
Geoffrey T. Stover
Sophy Chen
STEINBRECHER & SPAN LLP
1155 F St, NW Suite 1050
Washington, DC 20004
(202) 559-8680
rspan@steinbrecherspan.com
gstover@steinbrechspan.com
schen@steinbrecherspan.com

September 29, 2014 Counsel for United Airlines, Inc.

 TABLE OF CONTENTS

I. Summary of Uniteds Positions. ................................................................................... 1

II. The Department Lacks Evidence to Justify the NPRM. ............................................... 6
III. Uniteds Specific Comments on the Departments Proposed Rules. ............................ 8
A. The pre-purchase disclosure requirements introduced by Proposal 2 will
create consumer confusion and impose an unjustified burden on carriers. ...... 8
1. The Department has not established a need for the new
requirements imposed by Proposal 2. ....................................................... 9
2. The proposed rule requiring disclosure of fees for advance seat
assignments is problematic. .................................................................... 12
3. The proposed rule requiring disclosure of ancillary service fees at
the first point in a search process is problematic................................. 15
4. The Department should not force carriers to distribute ancillary-
service-fee information to GDSs. ........................................................... 20
5. There are many alternatives to Proposal 2 that could ensure
consumers receive information about ancillary service fees. ................. 24
6. If the Department adopts Proposal 2, United urges certain
modifications to mitigate the harm that would result from these
unwise rule proposals.............................................................................. 25
B. United opposes Proposal 4 because the new data reporting requirements
would provide less meaningful information to consumers and would
create significant and unnecessary burdens for United and other carriers...... 26
1. The Department has not established a need for the new reporting
requirements imposed by Proposal 4. ..................................................... 26
2. The proposed change in the basis of bag reporting and inclusion of
performance data of code-share partners would create consumer
harm. ....................................................................................................... 28
3. The new reporting requirements would impose a significant burden
on United and other carriers. ................................................................... 29
4. If the Department adopts Proposal 4, United urges that certain
modifications be made. ........................................................................... 31
C. Proposal 5 should be modified to ensure that ticket agents refund
policies are coterminous with the carriers refund policies. ........................... 32

i
IV. The Departments Regulatory Impact Analysis Vastly Understates the Costs
That Will Be Borne by Consumers and the Industry. ............................................. 33
V. The Proposed Regulatory Text in Part 256, Concerning Display Bias, Should
Be Amended to Be Consistent with the Departments Description in the
NPRMs Preamble. ................................................................................................. 34
VI. Proposal 10c, Relating to DOTs Capacity to Impose Civil Penalties, is Beyond
Its Authority, and is Plainly Arbitrary and Capricious. ........................................... 34
VII. Conclusion. ............................................................................................................. 35

ii
 BEFORE THE
DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.

Transparency of Airline Ancillary Fees and Other Docket No. DOTOST20140056

Consumer Protection Issues; Proposed Rule

COMMENTS OF
UNITED AIRLINES, INC.

United Airlines, Inc. (United) provides these comments on the Departments May 23,
2014, notice of proposed rulemaking. In addition, United actively participated in the
development of the comments submitted by Airlines for America (A4A) and explicitly
endorses them.

In these comments, United explains its opposition to parts of the Departments proposal
and where possible suggests reasonable alternatives for the Department to consider.

I. Summary of Uniteds Positions.

United shares the Departments goal of improv[ing] the air travel environment1 by
providing consumers with the information they need to make decisions about purchasing
air transportation. DOT correctly observes that consumers should have access to clear and
accurate information about air transportation prices, as well as data regarding aspects of
an airlines operations, such as its on-time performance record.

United is committed to providing excellent service to our customers, which includes

providing them with information about Uniteds fares and services in a clear and useful
manner. We have invested heavily to create top-quality ancillary services for our
customers. We also have devoted considerable resources to optimizing information
technology and training that informs our customers about all of these available services.

With that background in mind, United respectfully submits that the rules proposed by the
Department will not achieve the Departments goal of ensuring that consumers receive
clear and accurate information about air transportation services. To the contrary,
implementing these proposed rules would result in a net harm to consumers. It would
force United and other carriers to abandon innovations in the way they display fares and

1
79 Fed. Reg. 29970, cols. 1 and 3.

1
schedules and offer discounts to consumers, including in some cases the practice of
offering fare bundles that include reduced charges for ancillary services like bag fees
with air fare. This would be a bad outcome for consumers.

In addition, these rules would impose significant and unjustified burdens on air carriers.
To begin, the NPRM simply proposes too many new rules covering too many subject
matters. DOT has proposed nine new ruleseach with multiple subpartsand six
amendments/corrections to existing rules. The rules span various facets of a carriers
interactions with its customersfrom defining basic ancillary services to include
advance seat assignments, to expanding carrier reporting requirements to include data
from code-share partners, to prescribing the ways and the place that price information
must be displayed, to mandating customer service commitments for ticket agents. As
discussed below, some of these rules would have profoundly negative impacts on
consumers and on carriers. They also threaten to interfere with business relationships
between carriers and intermediaries.

The Departments decision to propose these new and far-reaching rules is premature. In
fact, the market is already addressing many of the Departments concerns. United
welcomes this chance to contribute to the record for this rulemaking and to shed light on
how market innovations are benefitting consumers and what costs the proposals would
impose on the public and on airlines. United believes that the Department would decide
to defer action on at least some of its proposed actions, if it were to consider all of the
available evidence.

While the Department proposes sweeping and costly changes in the air transportation
market, the data it offers in the NPRM and the Initial Regulatory Impact Analysis
(IRIA) reveal that DOT has little or no evidentiary support to promulgate this new slate
of rules. For instance, the Department admits it lack[s] sufficient data to be able to
quantify the extent of [passengers need to be protected from allegedly hidden and
deceptive fees],2 but then proposes a broad rule requiring disclosure of ancillary service
fees anyway. DOT should exercise its enforcement authority where needed, but also
recognize when the market responds to genuine consumer needs. For most of the
proposals, DOT should defer action on these rules, lest they be void for lacking a rational
basis.3

Substantively, too, many of the proposed rules are deeply flawed. United here
summarizes its views regarding two of the key new rules introduced in the NPRMs
Proposals 2 and 4.
2
79 Fed. Reg. 29975, col. 2.
3
See 5 U.S.C. 706.

2
The group of rules proposed by the NPRM as Proposal 2 would require carriers to
distribute information about basic ancillary serviceswhich the NPRM defines to
include fees for advance seat assignmentsto agents that sell tickets directly to
consumers (Option B). Under another alternative (Option A), carriers would have to
distribute the same information to Global Distribution Systems (GDSs) as well, even if
a GDS does not sell a carriers tickets directly to consumers. Ticket agents (under
Option B) and ticket agents that sell directly to consumers as well as GDSs (under
Option A) would be required to display this information on websites at the initial point
where consumers are able to compare fares and itineraries. Aside from the complete lack
of evidence for the need for such a rule and the IRIAs estimates that the costs of these
proposals exceed benefits by tens of millions of dollars,4 both options for Proposal 2 are
problematic in several respects:

Including advance-seat-assignment charges among the basic ancillary service

fees that must be disclosed as part of initial fare displays makes no sense.5 Every
ticket, of course, guarantees a passenger a seat on the plane, with no additional
mandatory seat-assignment charges. By definition, an advance-seat-assignment
charge would apply only if a passenger wants to purchase a non-basic seat
assignment, such as an exit-row or bulkhead seat in instances where such services
are offered. United does not interpret this proposed rule to require disclosure of
advance-seat-assignment charges for seating in premium seating sections (e.g.,
First, Business, BusinessFirst, and Economy Plus). There is no evidence in the
NPRM or the IRIA that consumers are confused that these differentiated cabins
and services might cost more than basic economy service. The final rule should
clarify this point.

The Departments proposed requirement to include fees for basic ancillary

services for websites marketed to the general public in the United States at the
first point in a search process where a fare is listed in response to a specific flight
itinerary request from a passenger is actually harmful to consumers. The rule
would noticeably delay the return of search results (especially for results
involving multiple carriers), lead to information overload and an unnecessarily
complex shopping and booking path, and diminish consumers ability to review a
full range of flight options. At the end of these comments, United has appended

4
Initial Regulatory Impact Analysis (IRIA), at 68-70 (Docket No. DOT-OST-2014-0056; April
16, 2014).
5
Among other things, the U.S. carrier with the most domestic scheduled enplanements does not
offer advance seat assignments at all, either as part of the ticket or as a separate ancillary service.
Given that, it is hard to see how an advance seat assignment can be a basic ancillary service.

3
 screen displays that illustrate how the new rule would crowd out the crucial fare
and schedule information consumers actually use to make their decisions. United
has learned over many yearsthrough extensive consumer feedback and other
empirical observationsthat many customers do not want this information at any
point, and certainly not when they are looking at the first display that shows their
search results.

The Department should not require carriers to provide ancillary-service-fee data

to GDSs (Option A of Proposal 2). United has already invested heavily in
developing relationships with certain partners to provide fare and some fee
information and transactability for ancillary services. There is no need to regulate
how and with whom carriers partner to distribute information to consumers. In
fact, the manner in which DOT proposes to require distribution to GDSs would
result in carriers, including United, having to abandon innovative systems and
revert to technology with poor functionality. This change will reduce the number
of price and service options that United is able to make available to consumers
and cause the public to lose the benefit of recent and forthcoming advancements
in airline distribution.

The Department also should not require carriers to distribute ancillary-service-fee

data to all ticket agents that sell the carriers tickets directly to consumers
(Option B). While United prefers Option B to Option A, Option B would also
likely require carriers to enter into business arrangements they would not enter
into, absent the rule. Given the proposed compliance deadlines, this almost
certainly means carriers would be forced to provide fee information for ancillary
services to GDSs. This would perpetuate a negotiating disadvantage for carriers,
generating extra costs for consumers while wasting carrier investments in
innovative ways of providing consumers with useful information about fares and
ancillary services. To be clear, Option B, while preferable to Option A, would lead
to many of the same negative consequences and costs as Option A.

The rules set forth in Proposal 4 would expand reporting requirements to require
mainline carriers to file an additional set of reports that would include their domestic
code-share partners. United summarizes its views on Proposal 4 as follows:

Far from providing a more accurate picture of airline on-time performance, the
new proposed mishandled-baggage statistic for the Air Travel Consumer Report
(ATCR) would actually be less useful. The ATCR should retain the current basis
for mishandled-baggage reporting that is an international standard across the
airline industry and that has served the public and Department well for decades.
United subscribes to joint comments filed in this docket on this subject by

4
 American Airlines, Delta Airlines, and United Airlines that oppose any changes in
the data that carriers report to the Department regarding mishandled baggage.

The proposed change in mishandled-baggage reporting would impose tremendous

costs on legacy carriers. United estimates its reporting costs would more than
double.

With regard to the proposal to expand the number of reporting carriers, United
agrees with the Department that it may be useful to expand the reporting universe
and with the comments submitted by A4A that each carrier should report its own
data only. This adjustment to the current proposal would address cost and timing
issues that would plague any process that would require one carrier to report on
anothers behalf and allow DOT to aggregate on-time, mishandled-baggage and
oversales data as it sees fit.

United also takes serious issue with the Departments IRIA. We first note that the IRIA
calculates that the costs (over a ten-year period) outweigh the benefits (also over a ten-
year period) by over $55 million$80.51 million costs for $25.1 million in benefits at
net present value.6 This alone suggests that DOT ought to reconsider the wisdom of the
NPRM.

In addition, however, the Department has vastly understated the costs that would be
incurred. The incremental costs for just the additional reporting involving code-share
partners would cost United alone millions of dollars annually. Incredibly, the IRIA
estimates that the new reporting requirements will cost the entire industry $29.8 million.
This estimate is woefully inaccurate.

The IRIA projects that these new rules will benefit consumers by bringing about
increased competition and improved performance. But micromanaging through
regulationwhich is what these rules do when they dictate the precise manner airlines
communicate with their customersis not the answer. Rather, continued competition in
the marketplace will motivate airlines and ticket agents to provide consumers with the
information they want and need, just as market forces have spurred innovations that have
led to, in some cases, carriers providing intermediaries with information about ancillary
services. The regulatory interventions proposed here are unnecessary and would be
counterproductive.

6
79 Fed. Reg. 29972, table.

5
II. The Department Lacks Evidence to Justify the NPRM.

DOT states that the goal of its proposed rules is to enhance protections for air travelers
and to improve the air travel environment.7 The Department, however, admits that it
lacks basic information about whether, and to what extent, consumers actually need the
protections the rules purportedly would provide. Certainly, the IRIA demonstrates that the
proposed rule would impose costs that are tens of millions of dollars more than its
anticipated quantifiable benefits, even without accounting for costs the IRIA altogether
ignores or understates.

Notably, DOT previously deferred action on a rule requiring carriers to provide

information on ancillary services to GDSs because it lacked information regarding the
need for such a rule. Specifically, in the second passenger-protection rule in this series
(PP2)8 DOT concluded:

We cannot at this time agree that it is in the public interest

to mandate [requiring carriers to provide information on
their ancillary service fees to GDSs], since we lack
information critical to a decision on the issue. Thus, in
order to permit us time to obtain additional information
about costs, benefits and consequences of requiring U.S.
and foreign carriers to provide ancillary fee information to
GDSs, including those involving competition, the
Department is deferring final action on this matter.9

The Department still lacks evidence that establishes the need for a rule mandating that
carriers distribute data regarding ancillary services to GDSs. DOT admits that we lack
sufficient data to be able to quantify the extent [that passengers need to be protected from
allegedly hidden and deceptive fees and allowed to price shop for air transportation in an
effective manner].10

The NPRM then goes on to request comment from consumers about whether it is
difficult to find baggage and seat assignment fee information and how much of an impact
this has on their ability to comparison shop among carriers. The Department also requests
comment from consumers on whether and how much the fee disclosures required of

7
79 Fed. Reg. 29970, col. 1.
8
Enhancing Airline Passenger Protections, 76 Fed. Reg. 23110 (April 25, 2011) (codified at 14
C.F.R. pts. 244, 250, 253, 259, and 399).
9
76 Fed. Reg. 23150, col. 1.
10
79 Fed. Reg. 29975, col. 2.

6
carriers and travel agents in PP2 have improved their ability to find information on
fees.11 In other words, DOT still does not know whether consumers actually experience
challenges in comparison shopping at this time, even ignoring whether the Department
has the authority to adopt rule to facilitate comparison shopping and whether the present
proposals meet this speculative need or do so in a cost-efficient way.

Indeed, the entire NPRM and IRIA are bereft of evidence showing a need for this newest
raft of rules. The Department relies on suppositionrather than on concrete datato
conclude that the marketplace needs increased regulation. DOT, for example, simply
hypothesizes that increased government control of the way baggage services are sold is
needed: [t]he Department believes that transporting baggage is intrinsic to air
transportation and baggage fees are a major factor for consumers when deciding which
air transportation to purchase, and should be subject to the rule prohibiting post-purchase
price increases.12

As the Department has correctly observed elsewhere, it possesses extremely limited

powers with respect to domestic airfares and related conditions, in light of the Airline
Deregulation Act (ADA). 13 The ADA, after all, mandates that DOT allow[] the
marketplace to govern carrier decisions regarding fares and their associated conditions
absent compelling evidence of consumer deception or unfair methods of competition.14
History has also shown, in the years since the PP2 rulemaking was issued, that United
and other carriers have reached commercial agreements with the major GDSs, further
proof that the marketplace is working as it should.

Just as the Department deferred rulemaking on the GDS issue when it lacked sufficient
information, so too should DOT wait until it has the facts before it imposes the far-
reaching rules proposed here.

11
Id.
12
79 Fed. Reg. 29990, col. 3 (emphasis added).
13
Petition of Joel Kaufman, Order 2003-3-11, at 2 (DOT Mar. 18, 2003), at http://www.dot.gov/
sites/dot.dev/files/docs/2003-3-11.pdf (Kaufman Petition).
14
Kaufman Petition at 2 (emphasis added); see also Order 2012-11-4, at 4 (DOT Nov. 6, 2012)
(denying request to regulate change fees), at http://www.dot.gov/sites/dot.dev/files/docs/
eo_2012-11-4.pdf.

7
III. Uniteds Specific Comments on the Departments Proposed Rules.

A. The pre-purchase disclosure requirements introduced by Proposal 215

will create consumer confusion and impose an unjustified burden on
carriers.

United endorses A4As comments on Proposal 2 and provides these additional comments
on the Departments proposal.

To begin with, the Department has not presented sufficient support for asserting that
current disclosure practices regarding ancillary service fees are misleading. Beyond that,
Proposal 2 is flawed in at least three respects: (1) it includes advance-seat-assignment
charges among the fees for basic ancillary services that carriers and tickets agents must
disclose to consumers at all points of sale; (2) it requires carriers and ticket agents to
disclose (or to display by a link or rollover) a current list of basic ancillary service fees at
the first point in a search process where a fare is listed on websites marketed to U.S.
consumers; 16 and (3) one of the proposed options (Option A) requires carriers to
distribute fee information for basic ancillary services to GDSs.

As discussed below, United believes that much better, more cost-effective ways exist to
ensure that the segment of consumers who are interested in ancillary services get accurate
information about charges when they want it. Also, as discussed below, if DOT presses
forward with some version of Proposal 2, it must clarify or modify the proposed rule in
several respects.

Finally, while United opposes Proposal 2, we agree with the Departments tentative
determination that, should it elect to adopt the proposal, there is no need to require
ancillary services to be transactable via selling agents.17 We also agree with DOTs
apparent intent that any disclosure requirements adopted would apply only to websites
and not mobile applications. Mandating the disclosure of ancillary service fees for mobile
device applications is simply not workable. Any marginal benefit of the disclosure would
be outweighed by the confusion to the consumer caused by a far less user-friendly search,
not to mention the tremendous cost to carriers in lost business and re-programming the
applications.

15
79 Fed. Reg. 29974-80. The new rules would be codified in 14 U.S.C. 399.85 and 399.90.
16
79 Fed. Reg. 30000, col. 2 (proposed 399.85(b)).
17
79 Fed. Reg. 29979, col. 3.

8
 1. The Department has not established a need for the new
requirements imposed by Proposal 2.
For competitive reasons, United has an incentive to display its services and prices clearly
to shoppers and travelers. That incentive and the existing regulatory scheme governing
disclosures to consumers have combined to be effective. DOT does not adequately
establish a need to promulgate further rules to prescribe how carriers and ticket agents
disclose information regarding the price of air transportation. The Department relies on
anecdotes rather than evidence and provides no concrete proof that consumers are
genuinely unable to discern the information they need to make decisions about buying air
transportation.18 Information the Department entered into the docket in response to A4As
request regarding the number of consumer complaints about ancillary-fee transparency
(and not the existence of fees) provides no support for the NPRM.

As a general matter, United agrees with the Departments observation that there is no way
to determine which pricing features are important to each traveler.19 This is a matter for
the market to determine, and United again urges the Department to defer action on this
proposal.

For example, Uniteds data shows a significant portion of our customers are not interested
in information about baggage charges because they opt not to check bags,20 do not know
when they are booking their travel whether they will check bags, or do not pay baggage
charges because of loyalty program status, co-branded credit cards, corporate agreements
or other reasons. But, under Proposal 2, United and its agents would be forced to provide
this information to these customers, even though they do not want it. The rule will
impose direct costs on carriers as well as indirect costs on consumers, in the form of lost
time because they would have to wait longer for search results and spend more time than
they do today researching itineraries.

Consumers who are interested in the prices of ancillary services already have access to
the information they need through a carriers website. Carriers provide this information
for commercial and service reasons, and in accordance with 14 C.F.R. 399.85(b).
Carriers, travel agents, and consumers have become accustomed to accessing this

18
79 Fed. Reg. 29974-75.
19
76 Fed. Reg. 23148, col. 1 ([The Department] believe[s] that there is no practical way to
identify what [ancillary service fees are] significant, as each traveler, and even airline, might
differ over what is significant.).
20
On United, each traveler can bring on board one carry-on bag plus one personal item free of
charge with additional free allowances for items like baby strollers and certain assistive devices
for passengers with a disability.

9
information via carrier websites. Everyoneincluding the consumers and corporate
travel companies that, according to DOT, have identified the lack of complete
transparency of fees for unbundled services and products as a problem21has one-click
access on united.com to complete and current information about Uniteds fees for
optional ancillary services. The same is true on the websites for every other U.S. and
foreign carrier that advertises or sells air transportation in the United States. If a carrier or
agent does not provide access to this information as required the Department of course
may use its enforcement authority against that entity.

GDSs that serve as a link between carriers and ticket agents and those ticket agents that
might support regulation have not explained how agents are able to provide their clients
with detailed information about hotels, tours, and cruiseswhich they access through the
internet22but are somehow unable to access similar information that is readily available
on carrier websites. In fact, ticket agents already have access to the data they need
through airline websites, primarilyto provide their clients with comprehensive
information about ancillary services.

United has devoted considerable resources to enable its customers and ticket agents to
easily find information about the baggage rules, seat-type availability, and other ancillary
services that apply to a passengers itinerary. For example, to learn how much it will cost
to check bags for a flight, customers can use Uniteds interactive baggage-fee calculator
(available at http://www.united.com/CMS/en-US/travel/Pages/CheckedBaggage.aspx). To
use the tool, a passenger can sign into a MileagePlus (Uniteds loyalty program) account.
Alternatively, both customers and ticket agents can enter a flight confirmation number
into the tool. In both cases, the calculator will display the checked-baggage service
charges that apply to the passenger for his specific itinerary. Even without a flight
confirmation number, passengers and agents can look up checked-baggage service
charges and easily establish the charges that would apply to any passengers trip.

United has created a similar tool on united.com to enable anyonecustomers and ticket
agents aliketo obtain information about aircraft seating options. These are examples of
the type of innovation that flourishes when carriers are allowed to respond to genuine
consumer demand rather than regulatory intervention.

21
79 Fed. Reg. 29974, col. 3.
22
A recent Travelport report illustrates that agents are sophisticated users of websites: [T]ravel
agents are tapping into multiple web sites [sic] and other sources, and working across multiple
platforms to find more options for travellers. Travelport research has shown that travel agents
query an average of 17 different web sites [sic] or information sources prior to each booking.
What Do Travel Agents Really Need From A Global Distribution System Today? (2011) available
at https://developer.travelport.com/euf/assets/developer-network/pdfs/usability-study.pdf.

10
In any event, since January 24, 2012 (the effective date for 399.85(b)), all carriers have
provided a central webpagelinked from an airlines homepagethat lists fees for all
optional services.23 As the Department noted in the preamble to the PP2 final rule,24 this
requirement ensures each carrier provides information in a centralized location that is
easily accessible for a consumer to review prior to buying a ticket.25

Consumers therefore already have transparent information about charges for a first and
second checked bag, a carry-on bag, and an advance seat assignment (if offered)and
charges for all other optional services. In particular, United goes to great lengths to make
fees associated with the differentiated Economy Plus product very clear during booking
and payment. Uniteds customers are not surprised that they paid for Economy Plus; they
choose this extra service willingly and deliberately. The current disclosure requirement
and market forces are sufficient and effective for protecting consumers from unfair and
deceptive practices, and the Department has provided no basis for amending the current
rule.

In terms of comparison shopping, and to the extent comparison shopping is a legitimate

regulatory objective for DOT,26 the current full-fare advertising and ancillary-service-fee
disclosure rules, together with the 24-hour period carriers must provide to consumers to
change their minds about a ticket purchase without penalty, provide opportunities that are
more than reasonable for consumers to further consider fares, schedules, and the
availability and pricing for ancillary services. In other words, consumers already have the
tools they need to comparison shop effectively.

Notably, because of the Departments prudent decision in its last rulemaking not to act on
the GDS issue, the market (including third-party channels) has already started to respond
to consumer demands for even better access to information about optional airline

23
14 C.F.R. 399.85(d).
24
79 Fed. Reg. 23110.
25
76 Fed. Reg. 23148, col. 1.
26
United respectfully submits that DOT lacks authority to regulate comparison shopping and
therefore comparison shopping cannot be a rational basis for the proposed rule. For these
reasons, we are pleased to see the Department acknowledge that the purpose of the proposed rule
is not to enable comparison shopping, See Summary of August 7, 2014, Meeting with A4A, at 4
(answer to question 9), available at http://www.regulations.gov/#!documentDetail;D=DOT-OST-
2014-0056-0624. The IRIA, however, includes asserted benefits accruing from faster comparison
shopping. IRIA, at 3, 40, and 46. Those benefits relating to comparison shopping should be
excluded when the Department weighs the benefits of the proposed rule against its substantial
costs. And the Department should explicitly subtract the comparison-shopping benefits from total
benefits in the final Regulatory Impact Analysis.

11
services. United has reached agreements with all three major GDSs (Sabre, Travelport,
and Amadeus), which enabled it to distribute ancillary services such as United
Economy Plus service. United has made these agreements based on consumer demands
and will continue to seek innovations to provide information to its customers. This is yet
another example that shows the market is able and willing to provide consumers with the
information that they need to purchase air transportation.

2. The proposed rule requiring disclosure of fees for

advance seat assignments is problematic.
To be clear, United believes the Department should eliminate Proposal 2 in its entirety. If
DOT insists on adopting some iteration of Proposal 2, United objects strongly to any rule
that would require carriers to include charges for advance seat assignments among those
ancillary service fees that carriers (a) must provide to ticket agents and (b) display at the
first point in a search process where a fare is listed in response to a specific flight
itinerary request on websites marketed to the general public in the United States.

a. There is no evidence that consumers regard

an advance seat assignment to be an
ancillary service intrinsic to air
transportation.
The NPRM does not provide a rational basis for DOTs novel view that an advance seat
assignment is a basic ancillary service. 27 Moreover, the Department provides no
support for its claim that the cost of [advance seat selection] weighs heavily into the
decision-making process for many consumers. 28 The only justification offered for
requiring carriers to disclose advance seat-assignment charges is a vague anecdote about
consumers complain[ing] that when shopping for air transportation they do not know
how much it will cost them to book seats together for family members.29

Contrary to the Departments claims, a guaranteed advance seat assignmentto a

particular seat (or group of seats) on the aircrafthas never been traditionally included
in the price of a ticket. As a result, consumers understand that they might need to pay

27
79 Fed. Reg. 29974-75.
28
79 Fed. Reg. 29977, col. 3.
29
79 Fed. Reg. 29975, col. 3. This is not surprising, given that data the Department has posted in
this docket shows that less than one passenger in one million passengers complains to the
Department regarding this broad area. See Memorandum of Notice of Communication re Airlines
for America Data Request (Sep. 22 2014), Docket ID No. DOT-OST-2014-0056-0646, available
at http://www.regulations.gov/#!documentDetail;D=DOT-OST-2014-0056-0646. This clearly
does not satisfy the requirement for rational agency decision-making.

12
additional charges if they need to know in advance that they will be able to travel in a
particular seat on the aircraftsuch as a window, aisle, bulkhead, or exit-row seat.30

Historically, carriers and travel agents did not (and indeed could not) routinely assign
seats when a passenger purchased a ticket. As is the case today, carriers did not
commonly guarantee a passenger or passengers a particular seat or particular group of
seats on the aircraft. In fact, until the internet made it possible for carriers to display
dynamic aircraft-seating charts directly to consumers, most passengers did not even have
the option to receive seat assignments until about 30 days before departure and quite
commonly only on the day of travel, when seats were assigned at the gate or check-in
counter by an airline agent using either a sticker or, later, a computer system.

Respectfully, the Departments understanding of the history of seat assignments on

aircraft is simply wrong. United and other airlines contracts of carriage plainly state that
a specific seat assignment is not guaranteed,31 and the proposed rule relating to the
disclosure of seat assignment fees is therefore built on an unsound foundation.

Moreover, nothing in the NPRM or the IRIA demonstrates that consumers somehow now
regard advance seat selection as basic and inherently included in the air fare. To the
extent that consumers perceive advance seat assignments (as opposed to non-advance
seat assignments) were included in the price of a ticket (something the Department has
not established), this perception is contrary to decades of history and airline contracts of
carriage.

Importantly, every passenger who buys a ticket on a United flight or a flight on any of
Uniteds partners or competitors in the United States will be assigned a seat at no
additional charge (though in some cases this will still happen at the gate). Therefore, the
rule does not need to prescribe how carriers must disclose charges concerning advance
seat assignments because passengers need not purchase this service to receive a seat
assignment.

30
However, under the Departments rules concerning nondiscrimination on the basis of disability
in air travel (14 C.F.R. pt. 382), carriers do not impose additional charges for providing required
accommodations for qualified individuals with a disability.
31
Clearly, having been explicitly excluded in carrier contracts of carriage, advance seat
assignments cannot today be described as a basic service or one that was traditionally
included in the price of a ticket.

13
 b. The proposed disclosure rule should not
apply to premium section seats.
The proposed rules include new requirements to provide consumers with information
about ancillary service fees associated with an advance seat assignment. Ifdespite
Uniteds objectionsthe Department adopts the proposed disclosure requirements for
basic ancillary services and it includes advance seat assignments among those basic
ancillary services, it must make clear that premium services, including United
Economy Plus seats, are not included in the final rule. Charges for seating in the
Economy Plus section (as well as in other premium sections) are not the equivalent of
charges for an advance seat assignment to a window, aisle, bulkhead, or exit-row seat.

Economy Plus is a distinct section of the aircraft and shares characteristics with the
premium cabins. The Economy Plus seats are adjacent to the First and Business Class
cabins (where those cabins exist) and are located towards the front of the aircraft.
Economy Plus offers more leg room than the general economy section.

United has invested heavily in making the special attributes of Economy Plus clear to
customers and travel agents. The NPRM does not claim, and there is no basis to believe,
that consumers are unaware that premium sections of the aircraft with features like
additional leg room (as in the case of Economy Plus) commonly involve additional
charges. In any case, the price for Economy Plus seats is made perfectly clear to
customers before purchase, so that no consumers who have chosen Economy Plus are
confused about what they are buying and what they are paying for it.

Additionally, if the final rule were to include Economy Plus seats in the required
disclosure of charges for advance seat assignments (which United believes the
Department did not intend), it would cause the display of schedules and fares to become
more cluttered and confusing to consumers. A final rule must not result in consumers
viewing pricing for Economy Plus (or other premium) seats alongside pricing for advance
seat assignments for window, aisle bulkhead, or exit-row seats. If the Department adopts
a requirement to disclose advance-seat-assignment fees, it should be limited to require
disclosure of a standard minimum seat assignment fee32 only.

Uniteds view is that the plain text of the rule clearly excludes First, BusinessFirst,
Business, and Economy Plus seats. But, in any case, United requests that the Department
make this clear in any final rule.

32
IRIA, at 39.

14
 3. The proposed rule requiring disclosure of ancillary
service fees at the first point in a search process is
problematic.
a. There is no evidence that consumers need or
want information about ancillary service
fees during an initial fare search.
The Department does not provide support for its theory that information regarding
ancillary service fees must be displayed at the first point in a search process where a fare
is listed in connection with a specific flight itinerary.33 In proposing this rule, DOT has
assumed incorrectly that consumers would benefit from an omnibus disclosure in which
all information regarding fares and certain ancillary service fees are presented at once,
very early in a search, even before the consumer has selected a potential itinerary. Not
surprisingly, the Department has proffered no data to support this assumption. As
discussed above, the current rulesincluding and especially 14 C.F.R. 399.85(b)are
sufficient to ensure that consumers have access to all the information they need regarding
the price of air transportation.

b. The proposed first point disclosure rule

would result in information overload and
diminish a consumers ability to effectively
search for flights.
Consumers will be harmed by any requirement that carriers and agents provide
information about ancillary services to consumers at the first point in a search process
where a fare is listed. On average, base fares comprise about 90 percent of the value of a
customers transaction with the airline. As one would expect, consumers are most
interested in viewing fares and schedules and not pricing for ancillary services.

Displaying ancillary service fees on the first search screen, or even making this
information available via the first screen using a link or pop-up, will appreciably increase
the time consumers have to wait to see search results. In cases where data is available via
link or pop-up, consumers would have to review the information for each itinerary. Also,
viewing this data would divert shoppers to an off ramp from the normal booking path,
whichfor most consumerswould be a waste of their time.

If the Department were to gather and review actual consumer data, it would concludeas
United did after analyzing customer feedback and as other carriers with similar booking
paths have also concludedthat consumers do not want to be inundated with information
regarding optional ancillary services when they have just started to look for a flight that

33
79 Fed. Reg. 30000-01 (proposed 399.90(e) in both Options A and B).

15
suits their basic travel needs. This new mandatory disclosure requirement would also
mean that shoppers would receive fewer results per page in response to their queries. In
an appendix to these comments, United has included mock screen displays that illustrate
the reduced number of search results. The mock displays also highlight how, by reducing
the number of itineraries included in the results of a schedule-based search, low-price
flights can be eliminated from receiving first screen prominence and thereby be missed
by consumers.

This would be a perverse outcome since one of the stated goals the Department identified
in the NPRM was to help consumers to price shop for air transportation.34 Not only is that
objective outside of the Departments regulatory authority, but any requirement to make
such data visible at or through the first search screen would result in consumers having to
wait longer for web sites to return search results. It would also increase the time
consumers would need to review results over multiple screens. As a result, the proposals
would waste many times more consumer time for every shopper than the IRIA assumes
the proposals would save for just a subset of savvy shoppers.

United wants to present information to consumers about the ancillary services it offers in
ways that are clear and easy to buy. With over 15 years of experience in selling air travel
online and hundreds of millions of searches and transactions, actual consumer feedback
as well as observations of consumer behavior (including data that shows when shoppers
abandon shopping due to information overload) informs Uniteds view. United has
expended considerable resources to deliver information regarding ancillary service fees at
the point where we know our customers wantand find it usefulto see it and where
United can provide results customized to the traveler.

c. The proposed first point disclosure rule

would cause search results to take longer
and waste consumer time.
From direct observation and analysis of shopping patterns, United knows that our
customers want quick search results. And, to the extent the IRIA can find that Proposal 2
provides consumer benefits,35 they supposedly take the form of greater efficiency by

34
And what good would it be for a consumer to know that a coach seat costs nothing on United or
Southwest, but on United the seat the consumer wants may have already been sold and on
Southwest the seat availability would be based on a roll of the dice involving who boards the
airplane first?
35
The NPRM and IRIA underestimate the amount and complexity of the information that the rule
would introduce into the shopping process. Information about prices for ancillary services is
extensive and highly variable with many possible price points based on specific service and
passenger characteristics.

16
consumers in flight purchases.36 But, in fact, the rule will cause consumers to spend
more time searching for flights. Providing consumers with baggage and advance seat-
assignment charges too early in the search process requires systems to process data for
many possible itineraries (in some cases across multiple carriers)slowing search results
for all searches (not just those for which a shopper might seek additional data) and
thereby decreasing efficiency for consumers.

The proposal to permit compliance through a link or rollover will also take up more
consumer time than todays process and will cause many passengers to receive inaccurate
information and overwhelm the consumer with too much unhelpful data at the wrong
point in the shopping process.37

The many harms to consumers and carriers that would flow from requiring ancillary
service fees to be displayed at a point far too early in the shopping process would be
made worse if the Department decides to bring mobile applications and mobile websites
within the scope of 399.85(b). 38 (If the NPRM, as it appears, did not intend the
ancillary-service-fee-disclosure rule to apply to displays on mobile devices, United
requests that the Department make its intent clear.) Mobile apps and mobile websites
cannot use links and rollovers effectively and disclosure of ancillary service fees would
effectively occupy all the available space on most mobile displays, leavingin some
casesno room to show the fare-and-schedule information the user wants to see.

d. The proposed first point disclosure rule

would reduce anonymous shopping and
cause consumer confusion.
Consumers generally prefer to shop anonymously at the initial stage. Consequently,
accurately displaying customer-specific discounts or exemptions is impossible at the
first point of the fare search process.

Many travelers do not make (and do not want to make) their identities known at a point
before search results are displayed. As a result, any display is likely to be misleading.
Charges for advance seat assignments cannot be disclosed to travelers accurately at the

36
Table ES-1, IRIA, at 3.
37
To fully estimate the additional search time, the Department would need to consider many
additional factors that drive up shopping time for billions of annual flight searches. These
include additional time reviewing unwanted or incorrect data (generic information when
passenger-specific exemptions or allowances apply), additional time entering traveler data earlier
in the shopping process to receive passenger-specific seat-selection or baggage-service pricing.
38
79 Fed. Reg. 29998, col. 1 (proposed 256.3(c)).

17
time and in the manner DOT proposes. Unless a traveler has provided personal
information, showing customer-specific discounts or exemptions is impossible.

To illustrate, United has included a chart on the next page that shows how frequently the
proposed rule would result in consumers being shown misleading information.

18
19
Even if providing consumers with accurate passenger-specific charges for advance seat
assignments were possible, encouraging consumers to disclose personal information very
early in the search process would create serious privacy issues and could eliminate
consumers ability to shop anonymously, which we believe DOT and many consumers
favorand which saves consumers time.

Further, if disclosure of advance seat-assignment charges is required, including this

information on the summary page at the end of a purchase39 could also be misleading.
This disclosure requirement might lead consumers to believe that the price shown for an
advance seat assignment is fixed even though the customer might not be able to purchase
the service for the same price at a later point.

United offers one last commentin the form of a questionon this proposal. How
would carriers comply with the proposed rule for itineraries covering multiple passengers
with different profiles, for whom availability and pricing for ancillary services could be
diverse?40

4. The Department should not force carriers to distribute

ancillary-service-fee information to GDSs.
a. There is no need for a rule prescribing the
manner in which and to whom carriers
provide information about ancillary service
fees.
The Department fails to adequately explain why carriers must distribute ancillary-service-
fee information to GDSs. Specifically, the NPRM fails to provide any compelling reasons
for why United should be required to provide fee information to channels that do not sell
its service directly to consumers.

Notably, and as the Department has acknowledged, the International Air Transport
Association has developed Resolution 787, an agreement to establish a common technical

39
79 Fed. Reg. 30000, col. 2 (proposed 14 C.F.R. 399.85(b)) (text after the last comma).
40
To display accurate information on ancillary services, even later in the booking process, the
shopper would need to provide and carriers would need to account for any or all of the following
combinations: 1) multiple passengers; 2) multi-passenger searches including passengers with
different fee allowance or exemptions; 3) multi-segment itineraries, especially where seat-
assignment fees apply to some but not all segments and the passenger may wish to pay an
advance seat-assignment charge for only certain segments; and 4) itineraries that include
multiple carriers.

20
standard that would enable carriers to provide fee information directly to travel agents.41
DOT approved Resolution 787 on August 6, 2014.42 The industry is therefore already
working on a methodologydriven by market forcesto provide fee information in a
standard fashion.43

To support the need for additional disclosure of fee information for ancillary services,
DOT claims consumers and corporate travel companies have identified the lack of
complete transparency concerning optional service fees as a problem, but it has not
supported this claim. The Department has not demonstrated how this proposal is
necessary or even helpful to prevent consumer confusion. Further facilitating the ability
of consumers to conduct price comparisons and making the job of travel agents easier in
helping their customerswhich appears to be the Departments motivation behind this
proposalis well beyond the agencys authority.

b. The proposed rule requiring carriers to

distribute ancillary-service-fee information
to GDSs exceeds the Departments authority.
The Departments proposal is overly prescriptive and arguably exceeds its authority to
prevent unfair or deceptive practices or unfair methods of competition in the sale of air
transportation. United disagrees with the Departments conclusion that, to protect
consumers from allegedly hidden and deceptive fees, it must adopt a rule that requires
carriers to distribute ancillary-service-fee information to GDSs. The proposed rule would
needlessly and excessively regulate commercial relationships between carriers and GDSs.

41
IATA New Distribution Capability, available at http://www.iata.org/whatwedo/airline-
distribution/ndc/Pages/default.aspx (last visited August 28, 2014).
42
Order 2014-8-1, Final Order (Action on IATA Agreement), Agreements among Member
Carriers of the International Air Transport Association concerning an agreement (Resolution 787)
of the Passenger Services Conference (Docket No. OST-2013-0048; Aug. 6, 2014).
43
Even Open Allies for Airfare Transparency does not object to Resolution 787. Together with
IATA, it filed joint recommendations to DOT concerning conditions to limit the scope of the
resolution to address data transmission standard-setting only, and not a new distribution business
model. See Open Allies and IATA Agree on Resolution 787 Conditions (Jan. 22, 2014), available
at http://faretransparency.org/open-allies-announces-agreement-with-iata-on-conditions-to-res-
787.

21
 c. The proposed rule requiring carriers to
distribute ancillary-service-fee information
to GDSs would result in a huge
technological step back.
DOTs proposal to require carriers to distribute ancillary-service-fee information to all
ticket agents would also effectively require carriers to use the only means available at this
time to distribute this informationthe Airline Tariff Publishing Company (ATPCO).44
ATPCO, however, does not have the technical capability to process constantly changing
prices for ancillary services that carriers offer or might want to offer, and it cannot
develop that capability anytime in the next several years.

The burdens imposed by the PP2 final rule should inform the Departments decision to
adopt rules affecting the enormously more complex area of seat-assignment charges. The
Department provided limited time to implement the bag fee rule, which left ATPCO,
despite its limited functionality, as the only viable option for carriers to comply with the
rule. Implementing the proposed rule for seat-assignment charges would be even more
complex than for baggage charges. Across the industry, myriad seat-assignment charges
could number in the millions. In contrast, carriers that participate in ATPCO offer what
United estimates to be a relatively modest 600 baggage charges.

After the Department adopted the PP2 rule, ATPCO sought to extend the compliance
deadline, citing the difficulty of supporting those relatively limited offerings for ancillary
baggage services. United believes that ATPCO and, in turn, the industry may have to
again request that DOT delay the compliance deadline here, if the Department finalizes
this proposal. The previous effort for baggage charges does nothing to accelerate
readiness for the far more complex proposed seat-assignment-fee rule. Moreover, there is
no reason to believe that ATPCOs capacity or development timeframe will be faster for
the more complex requirements of Proposal 2 than they were for the baggage rule.

Currently, through the dedication of tremendous resources, carriers such as United have
developed the technology to display dynamic pricing information in real time on their
websites. When United developed the technical capacity to offer dynamic pricing for
ancillary services, it was able to reduce some prices, stimulate demand, and offer
customers attractive value and services. The proposed rule would forfeit the consumer
benefits and reduce the value of variable pricing to United. United estimates that it would

44
Given the short duration allowed for airlines to comply with the proposed rule, ATPCO is the
only data supplier in the market capable of providing the services required by the proposed rules
on behalf of all carriers.

22
take ATPCO at least three to five years before it would be capable of enabling ticket
agents to similarly display dynamic pricing information.

Notably, United has worked bilaterally with each of the three major GDSs to provide
contentfee information for baggage services and advance seat assignments as well as
other ancillary servicesand has completed agreements with them to provide this
information for distribution to ticket agents. If the Department imposes a rule to require
carriers to provide this commercially valuable content to GDSs, the Department will have
needlessly and unlawfully interfered with Uniteds commercial relationships.

United has bilateral links to enable the sale of seats through all GDSs using next
generation XML technology. These agreements were finalized in 2013 and 2014 and
were enabled by the Departments prudent decision not to regulate in this space in PP2.
Implementation took place in March-August 2014. About 12-18 months passed between
agreement and implementation.

Despite United having implemented agreements with the GDSs (through technology that
does not involve ATPCO) to distribute some ancillary services, the company has received
explicit feedback from two of the largest travel agencies that they do not want to sell seat
upgrades (i.e., Economy Plus) to their customers. United has not observed significant
commercial uptake from this effort.

Importantly, the proposed mandate to require carriers to provide ancillary-service-fee

information to GDSs will harm consumers. This requirementcombined with the
existing requirements concerning how ancillary service fees must be disclosed45will
limit the ways in which carriers offer these services. For example, if a carrier wanted to
offer discounted baggage fees to some passengers, the combination of Proposal 2, and the
highly prescriptive disclosure rules and the restriction against post-purchase price
increases for baggage charges imposed in the PP2 final rule, would prevent that. Again,
ultimately, this will harm consumers.

United is committed to communicating the pricing of its ancillary services in a fair and
open manner and to offering customers products and services they want at attractive
prices. DOTs proposal will harm carrier investment in these objectives and waste
ongoing development of yet-improved website functionality that will present customers
with attractive offers that they want, when they want them, such as fare bundles that
have ancillary services included at a discount. The perpetual pressure of market forces,

45
Even today, the existing DOT rules governing baggage service fees, combined with limits on
ATPCO functionality, make it effectively impossible for carriers to discount baggage service
fees.

23
not backward-looking regulation is the path to consumer benefits. If carriers and agents
engage in unfair and deceptive practices, the Department already has the authority and
tools it needs to address such practices.

At a minimum, if the Department adopts Option A, the Department should extend the
implementation period to at least five years, so that ATPCO will have sufficient time to
develop dynamic price display technology or so that one or more airlines own systems or
new service providers will provide this capability.

5. There are many alternatives to Proposal 2 that could

ensure consumers receive information about ancillary
service fees.
At present, consumers or ticket agent can obtain fully transparent information about
pricing for ancillary services by reviewing information readily available on carrier and
third-party sites. Even if the Department believes that existing solutions are insufficient,
alternatives that are far faster and simpler than the proposed rule exist. For example:

Sites like iflybags.com make it possible for consumers to compare prices for
checked baggage services;

Some online travel agents (OTAs) already use pop-up windows to link to airline
and OTA websites to perform fare-shopping searches. It would be relatively
simple for an OTA to also search for ancillary-service-fee information directly on
an airline website at the same time the agent searches for available fares. This and
other existing technology could reach into carrier websites to extract relevant
information on ancillary service pricing specific to the consumers search and
even the consumers identity, returning better results faster. Among other options,
some travel agents program macros into their GDS to open up a browser session
on an airline website to book ancillaries. This is another route to enhance
information flow to agents. This solution would not require any GDS
involvement.

Carriers could provide ticket agents with a hyperlink to the website of every
carrier that appears during the booking process. For example, when Expedia
displays search results, it could provide a link to the airlines website, which
already displays fee information for all ancillary services (as required by existing
14 C.F.R. 399.85(d)). This would preserve the benefits of dynamic pricing for
carriers and consumers.

Other opportunities may exist for carriers to further integrate links between
carriers and OTA websites.

24
These are just a few of the many imaginable, but realistic ways to enhance the flow of
information among carriers, agents, and consumers while minimizing development time
and cost. Travel agents, GDSs, and other travel technology companies will respond and
have responded to genuine consumer demands for information that is important to them.
Agents use many sources of information for other travel products they sell.

6. If the Department adopts Proposal 2, United urges

certain modifications to mitigate the harm that would
result from these unwise rule proposals.
For the reasons set forth above, United strongly opposes both Proposal 2 options. If,
however, United were required to choose between Option A and Option B, it would
prefer Option B, which provides carriers with somewhat more flexibility with respect to
how they distribute ancillary-service-fee information. Such flexibility will allow carriers
to develop different methods of communicating sometimes complex information about
ancillary services (e.g., for a multi-person, multi-segment itinerary involving more than
one carrier and passengers with different entitlements and exemptions).

The NPRM suggests that the Department intends to include only standard-size and
standard-weight bags in Proposal 2. The final rule should therefore also make clear that
oversize-baggage and overweight-baggage charges are excluded from the display
requirements. These types of charges rarely apply, and this type of informationwhen it
appears next to base fareswill tend to overwhelm and confuse consumers.

In addition, the rule should provide ample time for carriers to implement its requirements.
Any final rule would mark only the beginning of a long period wherein the parties
responsible for implementation (including DOT) would have to work together on the
details.

Finally, United agrees with the Departments position that ancillary services are not
required to be transactable by agents. United must be able to determine who may
distribute its services and how those services may be sold. The NPRM does not propose
and the IRIA does not consider the extraordinary costs of a requirement including making
ancillary services transactable and the final rule must not include any such misguided
requirement.

25
 B. United opposes Proposal 446 because the new data reporting
requirements would provide less meaningful information to
consumers and would create significant and unnecessary burdens for
United and other carriers.

The Department proposes a rule that would make carriers responsible for reporting data
on behalf of their code-share partners for domestic flights. Specifically, carriers would be
required to report data regarding code-share partners on-time performance, mishandled
baggage, and oversales. United reiterates its support for A4As comments in this docket
with regard to the Departments proposed rule on data-reporting.

While the comments below specifically address concerns with Proposal 4, United
supports Proposal 3, which would expand the pool of reporting carriers. United also
endorses A4As comments on Proposal 3. The Department should require all carriers that
provide domestic scheduled passenger service, and which already submit Form 41 and
Form T-100, to report. This will increase the amount of public information available to
consumers.

DOTs proposal to require carriers to report their code-share partners service quality
data, however, amounts to a majorand ill-conceivedoverhaul of the current reporting
requirement. United agrees that providing consumers with accurate data about regional
carrier code-share operations is important but adding this to the reporting obligations
already borne by legacy/mainline U.S. carriers would impose a tremendous burden.
Moreover, there are less burdensome alternatives to achieving this goal. Additionally,
United believes that the reconstituted ATCR envisioned by the DOT proposal could
provide consumers with misleading information. For these reasons and for the reasons
A4A sets out in its comments, United opposes the promulgation of this new rule as
written.

1. The Department has not established a need for the new

reporting requirements imposed by Proposal 4.
The Department again articulates a very thin basis for introducing this new reform. The
NPRM hypothesizes that the limited scope of the current reporting requirements may
result in consumer confusion or misperception.47 But DOT proffers no consumer survey
data, or even anecdotal evidence, to support this hypothesis.

46
79 Fed. Reg. 29982-84. This proposed rule would be codified at 14 C.F.R. 234.4, 234.6,
244.2, 244.3, 250.2b, 250.10.
47
79 Fed. Reg. 29982, col. 3 (emphasis added).

26
However, the Government Accountability Office (GAO) exhaustively addressed data-
reporting on flight delays in its September 2011 report, Airline Passenger Protections,
More Data and Analysis Needed to Understand Effects of Flight Delays. 48 After
carefully considering all of the evidence, the GAO recommended that the Department,
[c]ollect and publicize more comprehensive on-time performance data to ensure that
information on most flights is included in the Bureau of Transportation Statistics
database. DOT could accomplish this by, for example, requiring airlines with a smaller
percentage of the total domestic scheduled passenger service revenue, or airlines that
operate flights for other airlines, to report flight performance information.49 United
agrees with this recommendation and supports expanding the universe of carriers that
must report on-time performance data to BTS.50

Critically, the GAO Report did not recommend additional reporting requirements for
regional carriers regarding mishandled baggage or oversales. Rather, the GAO report
asserts only that consumers would be better off if the ATCR included additional on-time
performance data. DOT offers no cogent explanation for diverging from the GAO Report
and proffers no evidence to justify requiring additional mishandled-baggage and
oversales reporting for code-share partners.

48
U.S. GOVT ACCOUNTABILITY OFFICE, REP. NO. GAO/11-733, AIRLINE PASSENGER
PROTECTIONS; MORE DATA AND ANALYSIS NEEDED TO UNDERSTAND EFFECTS OF FLIGHT
DELAYS (September 2011) (GAO Report).
49
GAO Report, at 60.
50
United would welcome additional action on the GAO Reports second recommendation that the
Department fully assess the full impact of the tarmac delay rule and, if warranted, refine the
rule's requirements and implementation. Id.

DOT retained Econometrica to conduct an independent review of the tarmac-delay rules

impacts, which showed that the rule has not resulted in clear consumer benefits. The
Econometrica report states, It is difficult to characterize the overall impact of [tarmac-delay-
rule]-attributable changes in cancellations and lengthy taxi-out delays on passenger welfare.
Econometrica, Inc., Independent Review and Analysis of the Impact of the Three-Hour Tarmac
Delay Rule (January 9, 2014), 21, available at http://www.dot.gov/airconsumer/Impact-
Analysis-Tarmac-Delay-01092014. The Econometrica report recounts that HDR, the contractor
that prepared the Departments regulatory impact analysis for the rule, estimated that the rule
would cause only 41 flights to be cancelled. But subsequent reports have estimated that the
tarmac-delay rule has caused up to 13,000 flight cancellations. In other words, the actual costs
associated with the tarmac-delay rule could be as much as hundreds of times greater than the
Department estimated.

27
 2. The proposed change in the basis of bag reporting and
inclusion of performance data of code-share partners
would create consumer harm.
The new reporting requirements proposed by the Department would engender a number
of serious service and operational problems and would ultimately lead to a less
meaningful ATCR. We highlight here some of the problems the proposed rule would
cause.51

First, the expanded mishandled-baggage reporting rule would cause flight delays. To
comply with the rule, regional carriers (and, in some cases, mainline carriers) would need
additional block time, to capture the mishandled-baggage data called out in the rule. This,
in turn, will cost air travelers precious time. Delays will be especially lengthy in instances
where a passenger must gate-check a bag that he had intended to carry onboard but must
check because of aircraft space limitations. Tracking these bags would require returning
each bag to the gate to be tagged and scanned, which takes a matter of minutes, rather
than seconds, for each bags round trip to the gate and back to the aircraft.

Second, the new requirement to include code-share partners data will result in slower
reports. Collecting the additional on-time performance, oversales, and mishandled-
baggage data will take significantly more time for all reporting parties. United would be
unable to produce the additional reports, covering its code-share partner operations, as
quickly as it reports data that resides in its internal systems. Slower reporting would not
benefit the public or the government.

Third, the code-share partners data may not be reliable. As a practical matter, mainline
carriers like United may not be able to verify their code-share partners on-time
performance, mishandled-baggage, and oversales data in any meaningful way. United
may not be able to certify that the data received from a code-share partner is a true,
correct and complete report, as the Departments reporting rules and its reporting
directives require.52 For these reasons United endorses the A4A comments in this docket,
which support having each carrier report its own data.

Finally, the new reporting requirements will also perpetuate a fundamental flaw in the
ATCRits comparison, without explanation, of mainline carriers to low-cost point-to-
point carriers. Mainline carriers are able to serve more destinations through their hub-

51
There are other serious problems with the new mishandled-baggage metric. These issues are
addressed in industry filings in the RITA docket (see Note 53) and in Uniteds joint comments in
this docket filed with American Airlines and Delta Airlines.
52
Moreover, United does not have the IT infrastructure that would enable it to comply with the
code-share reporting requirement for non-regional code-share carriers.

28
and-spoke structure. In this regard, the hub-and-spoke system unmistakably serves the
interests of consumers by offering them more service.

Inevitably, however, a hub-and-spoke system will involve, for example, more delays than
point-to-point service. This apples-to-oranges comparison in the ATCR misleads
consumers into concluding that point-to-point carriers offer better on-time service. If
code-share partners data is imputed to their mainline carriers, this could lead to an even
more distorted view that point-to-point carriers have an even greater advantage in terms
of on-time performance.

In summary, the new reporting requirements would cause flight delays and lead to an
ATCR report that is less reliable and less timely. Substantively, too, the proposed changes
would exacerbate the ATCRs flawed comparison of mainline carriers versus point-to-
point carriers.

3. The new reporting requirements would impose a

significant burden on United and other carriers.
United participated in and reiterates support for joint comments filed in this docket with
American Airlines and Delta Airlines. If adopted, the new reporting rule would cost
airlines tens of millions of dollars, or more. United estimates that its data-reporting costs
would increase by at least 100 percent. This estimate is based on the projected increased
costs for obtaining and verifying the on-time performance, mishandled-baggage and
oversales data from its domestic code-share partners and then producing the new set of
reports (i.e., entering the data into Uniteds internal systems and processing that data).
The new reporting obligations would entail substantial manual, skilled-labor resources to
ensure data quality.

The biggest cost component of the proposed reporting rule is the expanded mishandled-
baggage reporting requirements. And as the Department knows, there is another NPRM
currently under consideration in a separate docket53 in which the Departments Research
and Innovative Technology Administration (RITA) has also proposed to amend
14 C.F.R. 234.6. 54 Comments in the RITA docket establish that implementing
Section 234.6 would cost each reporting carrier tens of millions of dollars. Indeed, United
estimates that the combined costs of both mishandled-baggage rules for it alone would
amount to tens of millions of dollars beyond current reporting costs. United estimates that

53
Reporting Ancillary Airline Passenger Revenue, 76 Fed. Reg. 41726, 41730, col. 1 (proposed
July 15, 2011).
54
Curiously, the IRIA fails to consider the costs associated with Section 234.6 that would also
apply to the code-share partners under Proposals 3 and 4. If these costs were included, they
would overwhelm any asserted benefits of the proposed rules at issue.

29
one-third of these additional costs would arise from the new requirements for reporting
code-share data.55

In terms of logistics, Proposal 4 presents a host of needless complications. For example,

United and presumably other airlines as well would incur new development and IT costs
each time its code-share relationships change.

Again, the combination of proposals to expand mishandled-baggage reporting obligations

for code-share partners (in this and in the RITA docket) presents the greatest difficulties.
The new rules would require carriers to provide automation at the large number of gates
that serve smaller aircraft and regional carriers relative to flights and passenger
enplanements. For mainline carriers like United, the proposed rule will require, among
other things: (a) baggage system reprogramming and adjustments to internal databases;
(b) additional hardware at gates to capture and appropriately tag gate checks; (c) high
costs for hardware and software to capture the total number of bags checked; and
(d) additional personnel to perform data collection and reporting functions.

Additionally, United would have to find a wayfor the first timeto modify bag tags
and associated systems to make marketing carrier information available. Currently,
Uniteds baggage service office has no way to determine the marketing carriers identity
and there is no business or service reason to associate marketing carrier information with
a bag tag. To incorporate marketing carrier information on bag tags and for that data to be
usable would require internal IT improvements to display marketing carrier information
on the bag tag as well as enhancements in scanning tags that would recognize marketing
code-share flight numbers.

If the Department adopts this proposal, United would also need to work with Star
Alliance governance to implement proposed mishandled-baggage reporting changes since
Star Alliance requires the bag tag to display operating-carrier information, rather than
marketing-carrier information. Far from the simple change the Department assumes,
changing well-established metrics would demand costly changes even at the international
and airline alliance level.

Moreover, smaller/non-reporting carriers generally have a lower state of automation and

information technology. Any version of proposed Section 234.6 will be
disproportionately burdensome for domestic regional code-share partners. To expand
mishandled-baggage reporting, some of these carriers would need to subscribe for the
first time to a management company solely for purposes of meeting new data collection
proposals. Some carriers use only paper files and would need to totally change their

55
Approximately one-third of Uniteds domestic enplanements are on regional code-share flights.

30
systems to enter the reporting universe. As a class, these carriers have a higher share of
bags checked at the gate and at planeside due to generally smaller space for carry-on
luggage. The operational burden of additional bag-tracking for these carriers will be
especially high since time needed to collect data for gate- and plane-side checked bags
would degrade on-time performance.

In summary, the proposed reporting requirements would be massively burdensome for

most carriers. The new rules impose tremendous costs and burdens and offer consumers
very little, if any, benefit. The proposed change in the basis of mishandled-baggage
reporting is by far the most concerning and costly proposal.

4. If the Department adopts Proposal 4, United urges that

certain modifications be made.
United agrees with the comments submitted by A4A in this docket that if any version of
Proposal 4 is adopted, DOT should modify it so that each carrierincluding regional
carriers acting as code-share partnersis responsible for reporting its own data. Simply
stated, mainline carriers should not report on behalf of their regional partners. Once DOT
has all the data,56 it would be free to aggregate reports as it sees fit. Reporting pace and
accuracy will both be improved over any requirement that the mainline carrier assume
responsibility for reporting for regional carriers.

If, however, the Department does not heed this suggestion and insists that mainline
carriers report on behalf of their code-share partners, the final rule should expand the
data-submission deadline for the code-share data only to at least 30 days after the end of
the month (i.e., so that mainline carriers have at least an additional 15 days to submit
code-share data). Mainline carriers will need more time to collect and verify the data
required by this proposed rule and verify its accuracy to the extent possible.

Moreover, DOT should clarify that Proposal 4 does not apply to non-branded code-share
flights operated by another carrier.57 United interprets the new rule to cover only flights
subject to a branded capacity purchase or prorate agreement between the marketing and

56
See A4A comments for discussion of an alternative approach to requiring mainline carriers to
report service quality data on behalf of their code-share partners.
57
Branded code-sharing that involves a capacity purchase or prorate agreement usually includes
distribution rights to all the seats on an aircraft and a degree of marketing co-branding. Non-
branded code-sharing with free sale arrangements usually does not include co-branding and
requires the marketing carrier to book from the operating carriers inventory. Moreover, the
operating carrier is simultaneously selling inventory and retains final authority over all inventory
decisions.

31
operating carriers (e.g., regional or express partners) and not flights that involve merely
marketing or free-sale code-sharing arrangements, but DOT should make this clear.

United also urges the Department to update its February 2013 policy clarification, in
which the agency made clear that it would attribute certain types of complaints to the
marketing/mainline carrier for flights operated by a domestic code-share partner. The
clarification causes additional complaints to be assigned to the mainline carrier but
does not make the corresponding adjustment in the system-wide enplanements reported
in the ATCR. Currently, the system-wide enplanement figures exclude enplanements on
the code-share partner. As a result, the ratio of complaints to enplanements for mainline
carriers appears relatively higher in the report than those carriers without code-share
partners. This practice leads to a report that is in fact misleading to consumers. This
change can be made at virtually no cost and with immediate benefits in the data quality
and usefulness for the traveling public and government decision-making.

Finally, carriers will need significantly more time to make the necessary adjustments that
would enable compliance with this new reporting regime. For the on-time performance
and oversales reports, carriers will need at least 18 to 24 months to transition to the
expanded reporting requirements. For the mishandled-baggage reporting requirements,
implementation should be deferred for a period of at least 36 months after the still-open
proposal to change the basis of mishandled-baggage reporting (Docket No. RITA-2011-
0001) is implemented.

C. Proposal 558 should be modified to ensure that ticket agents refund

policies are coterminous with the carriers refund policies.

The Department has established certain minimum customer service standards that
govern domestic and foreign air carriers obligations to disclose cancellation policies,
provide prompt refunds, hold reservations for 24 hours without penalty, and provide other
minimum customer service commitments.59 These rules were promulgated during the
PP160 and PP2 rulemaking processes.61 DOT now wishes to apply these requirements to
ticket agents with annual revenue of $100 million or more.

United has no objection to the Departments decision to extend these requirements to

ticket agents. The rule, however, needs to be amended to clarify that ticket agents must
provide the same cancellation and refund terms as offered by the carrierand no more.

58
79 Fed. Reg. 29984-86. The new rule would be codified at 14 C.F.R. 399.80.
59
14 C.F.R. 259.5.
60
Enhancing Airline Passenger Protections, Docket No. DOTOST20070022 (PP1).
61
79 Fed. Reg. 29984, col. 2.

32
In other words, the carrier should never be bound by a ticket agents refund or
cancellation policy, if it varies from the carriers policy. For example, a ticket agent may
not offer a 24-hour reservation hold policy if the carrier offers only a policy of allowing
refunds within 24 hours of purchasing a ticket.

IV. The Departments Regulatory Impact Analysis Vastly Understates the Costs
That Will Be Borne by Consumers and the Industry.

The Departments Regulatory Impact Analysis estimates the quantifiable cost of the nine
proposed rules is $80.51 million but the benefits will amount to only $25.1 million.62
DOTs own cost-benefit analysis, without more, suggests the new slate of rules is
unjustifiable. But the situation is actually far worse because the true costs of the new
rules will be far greater than $80.51 million.

With respect to the new data reporting requirements (Proposals 3 and 4), the costs to
reporting carriers alonecosts the IRIA ignores63would roughly double the IRIAs cost
estimates for these proposals. For a carrier that currently reports, Proposals 3 and 4 would
require the mainline carrier to report on behalf of its domestic code-share partners.
Mainline carriers would incur costs both to produce new data and to feed the data into its
internal systems and to quality check information. The process for ensuring data
qualitywhich unavoidably requires lots of manual and skilled laborfor DOT
reporting under Proposal 4 will impose high ongoing costs that far exceed the IRIAs
estimates. In addition, development and IT costs each time United changes its code-share
relationships would add additional costs, which the IRIA overlooks. There are very
significant costs to IT systems and data verification even for carriers that would accept
unaudited metrics from code-share partners. The majority of these costs would arise from
any expansion in mishandled-baggage reporting.

Against these higher costs, the IRIA assigns to Proposals 3 and 4 benefits that are largely
invented: improved handling of baggage for newly reporting carriers and code-share
flights for all reporting carriers, decrease in oversales, improved customer good will
towards carriers, insurance value (i.e., that many consumers place some value on
having information on carrier performance even if they do not use it immediately64) and
improved public oversight of the industry.65 None of these claimed benefits suggests

62
79 Fed. Reg. 29972.
63
See IRIA, at 58-59.
64
IRIA, at 57.
65
Table 20, IRIA, at 69.

33
carriers are currently engaged in any unfair and deceptive practice, and each claimed
benefit appears to exceed the scope of the Departments regulatory authority.

V. The Proposed Regulatory Text in Part 256, Concerning Display Bias, Should
Be Amended to Be Consistent with the Departments Description in the
NPRMs Preamble.

In the NPRMs preamble, the Department appears to intend that electronic airline
information systems (EAIS) that display biased results would be excepted from the
requirement to provide unbiased displays or to disclose biases when the bias is the result
of a corporate travel agreement in which a corporation has agreed by contract to biases in
the display used by its employees for business travel. Specifically, the NPRM states: "The
requirement to provide unbiased displays or disclose biases in the display would also
apply to electronic displays used for corporate travel unless a corporation agrees by
contract to biases in the display used by its employees for business travel."66

The proposed rules text, however, does not reflect the Departments stated intent to
except EAIS that display biased results because of corporate agreements covering
employee business travel. United, therefore, requests that the Department amend the text
of proposed 256.2 to make proposed part 256 consistent with the Departments apparent
intent. For example, the Department could amend the text as follows: This part applies
only if the electronic airline information system is displayed on a Web site marketed to
consumers in the United States or on a proprietary display available to travel agents,
business entities, or a limited segment of consumers of air transportation in the United
States, except that it does not apply to electronic airline information systems used for
corporate travel when a corporation has agreed by contract to biases in the display used
by its employees for business travel.

VI. Proposal 10c, Relating to DOTs Capacity to Impose Civil Penalties, is

Beyond Its Authority, and is Plainly Arbitrary and Capricious.

The plain language of 49 U.S.C. 46301(a) prohibits DOT from imposing a civil penalty
on a per-passenger basis. The statute permits DOT to impose a civil penalty of not more
than $27,500 upon air carriers and others for violating laws (and, in addition,
regulations properly promulgated under those laws) specifically identified in the statute.67
And Congress made clear in the statute that a separate violation occurs for each day
or if applicable, for each flight involving the violation 68 Therefore, the Department

66
79 Fed. Reg. 29989 (col. 2-3) (emphasis added).

34
may assess a civil penalty either on a per-day or, in some cases, on a per-flight basis, but
it cannot assess a civil penalty on a per-passenger basis to tarmac-delay rule violations.
United, like nearly every other domestic carrier, has repeatedly asserted our disagreement
with the Departments strained reading of the statute, which it seeks to clarify in this
NPRM.

VII. Conclusion.

For the reasons discussed above, the rules proposed in the NPRM will not advance
DOTs goal of empowering consumers by giving them improved access to information
about air transportation services. The existing rules are working. More to the point,
market forces are working. United competes for business by striving to provide the best
possible shopping and customer experience. This includes providing customers with clear
and accurate information about available services and their costs. The rules proposed here
will inhibit Uniteds ability to communicate price and service characteristics clearly to its
customers. In the end, the public will be better served if market forces are allowed to spur
innovation.

United joins in the A4A comments. In addition, and for the reasons stated above, United
urges the Department to withdraw Proposals 2 and 4 and modify Proposal 5 in the
manner described herein.

35
Department of Transportation
Transparency of Airline Ancillary Fees and
Other Consumer Protection Issues;
Docket No. DOT-OST-2014-0056

Appendix
50% Fewer Flight Search Results Per Screen

Todays Current Display DOTs Proposed Display Example