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Fly by Numbers?

Companies fight to ground the initiative to standardize company travel identification codes.

1Nov

The future is cloudy for an international initiative to standardize company travel identification codes across airlines after major U.S. corporations-- concerned that access to such data would make it easier for the airlines to collude on prices--fought to ground the plan.


"The corporate [identification] number is a gross violation of my company's privacy," wrote James F. Lennon, global travel leader at PricewaterhouseCoopers LLP, in his comment letter to the Department of Transportation (DoT). "Before providing data today, I require confidentiality, restrict use of data to my preferred carrier, and require limits on its proper use. The corporate num-ber denies my company these fundamental protections."


The identification system, proposed by the International Air Trans- port Association (IATA), would provide an airline with monthly aggregated data on its corporate customers, regardless of the channel through which a customer purchased tickets, as well as a clearer picture of corporate travel patterns.


The DoT approved the system for antitrust immunity in early June, then reversed itself later in the month. While disapproval from the DoT wouldn't prohibit the codes from being used, it would leave carriers vulnerable to Department of Justice investigations.


Thanks to an earlier version of the system that IATA claims the DoT approved "several years ago," airlines are technically safe to use the codes so long as they print them on the face of the tickets. But, because that stipulation has proven so unpopular and has been adopted by only "a handful of airlines," IATA is seeking approval for an amended version to keep the code off the tickets.


But corporate clients show no signs of being appeased. Morgan Stanley Dean Witter & Co. and McDonald's Corp. followed Price- waterhouse-Coopers with similar letters to the DoT, provoking a lengthy re- sponse from American Airlines that accused objectors of signing form letters that "showed a fundamental misunderstanding of the IATA proposal."


"It defies common sense to argue, as some have, that the use of this eight-digit code would violate privacy interests or be anticompetitive," the airline's attorneys said in their August 28 letter to the DoT. "Using a standard code will not give American any greater ability to identify corporate customers of other airlines or discover what fares or performance goals are in the contracts of other airlines." The code would, however, allow any airline that participated in the itinerary to see the data, American conceded.


The DoT decision, which has no deadline, would apply to any carrier flying from the United States to a foreign destination. "I think it [the Department of Transportation] carries a huge amount of weight, when you figure the 10 most powerful airlines are in the [United States]," says Cyndi Perper, president of the Alexandria, Va.-based National Business Travel Association, which opposes the measure.

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