New group to build industry standard on airline & hotel “unbundling”

Unbundling is the practice airlines and hotels levying extra charges in addition to their fares or rates for other services.

These include checking in baggage on airlines or WiFi connections in hotels and has become a controversial issue in the industry, raising billions of dollars for airlines in the USA.

The UK and Ireland Institute of Travel and Meetings (ITM) and the Business Travel Coalition (BTC) are setting up an international Industry Solutions Group (ISG), with the aim of “develop and build consensus around standards and policies for airline product unbundling”.

Members of the ISG will include corporate travel buyers and executives from airlines, airline alliances, GDS’s and travel associations.

The Business Travel and Meetings Show in London on February 9-10 next year will be the venue to present the stage one work of an “Industry Position Paper” when Group members will also debate the issue.

Chris Reynolds, ITM’s industry affairs chairman, said: “While the unbundling phenomenon essentially began with no-frills carriers in Europe and across the Atlantic, it has not yet been embraced by the network airlines in Europe anywhere near to the extent as in the US.

“However, European airlines are studying the development with an increased sense of competitive urgency given US carriers’ successes.”

The aim was to be “proactive and get out in front of this surging industry phenomenon.” said Mr Reynolds as the issue was causing “disruption”.

Kevin Mitchell, BTC’ chairman, said:

“There is great interest this subject and there are many questions to be answered.”

“Is airline product unbundling just a short-term financial lifeline for this most beleaguered of industries, or could it possibly represent a new and economically sustainable business model breaking out at the most opportune moment in time for airlines?”

www.itm.org.uk www.businesstravelcoalition.com