Amid speculation that the U.S. government as early as this month will announce its final ruling on regulations governing global distribution systems, Canada last month began to review its own GDS rules along many of the same lines.
"These proposed amendments recognize the important changes, such as the emergence of the Internet as a sales tool, that have come about since the original regulations were put in place in June 1995," said Canadian Transport Minister David Collenette in a statement last month. "They are the result of consultations with Canadian airlines, travel merchants and GDS vendors."
In Canada, regulations currently require airlines that have an ownership interest in a GDS company or a domestic marketshare exceeding 10 percent and participation in any GDS to participate in all four GDSs operating there. These carriers include Air Canada and WestJet and suffer from limited flexibility "to choose the lowest-cost means to distribute and sell their air services," said Transport Canada, at a time when "the advent of the Internet has provided lower-cost distribution options."
The agency also said the current rules inflate GDS costs by banning pricing negotiations and stifle innovation by regulating travel agency contract terms. However, "certain regulatory provisions, specifically those requiring that the information available through any GDS operating in Canada is displayed in a comprehensive, unbiased and neutral way, must be maintained."
Canada is considering repealing rules that dictate the following: Certain airlines must participate in all GDSs, price negotiations are prohibited and flights must be displayed in order of shortest possible trip. Transport Canada also said it is thinking about eliminating one current rule that "makes clear the entitlement of GDS vendors to sell and airlines to purchase marketing, booking or other sales data. However, an increasing number of bookings are being done through alternative distribution channels and, as such, are not contained in the GDS sales data."
The group proposed to leave Internet displays unregulated "because comparison shopping by consumers on different travel Web sites appears to provide the necessary market discipline." It said it "would continue to require a GDS vendor to treat its participating airlines in a non-discriminatory manner in all other respects."
Interested parties may comment to Canada's Transport Minister on the proposed regulations before Nov. 25 by writing to Nada Vrany, Director, National Air Services Policy, Transport Canada, Place de Ville, Tower C, 27th Flr., 330 Sparks St., Ottawa, Ontario K1A 0N5. Comments should cite the Oct. 25 Canada Gazette, Part I. The proposed U.S. rules
(BTN, Dec. 9) can be reviewed at www.dot.gov/affairs/CRSrule.htm, while industry commentary may be obtained at dms.dot.gov/search/searchFormSimple.cfm, docket number 2881.