In a statement to be released tomorrow, the National Business Travel Association will join the American Society of Travel Agents, Sabre Holdings Corp. and others in supporting full deregulation of the global distribution system industry. According to ASTA, the U.S. Department of Transportation next month will pass to the White House Office of Management and Budget its latest recommendations, at which point OMB will have 90 days to review and work with DOT on a final approach. Dozens of travel industry employees, including NBTA members, plan tomorrow to deliver to Congress a petition that calls for deregulation, officials said.
DOT's proposed rulemaking
(BTN, Dec. 9, 2002) contains a mix of both added and reduced regulation in various areas. This week's statements from ASTA and NBTA represent their clearest support for deregulation, despite their respectively multifaceted and singular opposition to the very same in the past.
In a June DOT hearing, ASTA head of legal and industry affairs Paul Ruden expressed skepticism about "the nature and effect of marketing relationships between airlines and GDSs. The question is, 'Are the airlines no longer influencing CRS behavior?' " The severing of ties between airlines and GDS companies is a major impetus for DOT's review of the rules, but a recent
BTN article showed the sale of Worldspan by American, Delta and Northwest airlines did not come without substantial long-term ties between the GDS company and its former owners
(BTN, July 7). Worldspan last month claimed the article's "details are neither complete nor wholly accurate."
Generally, advocates of deregulation have argued that DOT and other regulatory bodies will continue to have enforcement authority against anticompetitive behavior, even if the rules are eliminated. According to the latest ASTA Q&A on the regulations, "Of course, there are no guarantees in a deregulated market. If consumers are allowed freedom of choice, and the antitrust and consumer protection authorities do their oversight job, travel agents can succeed." Noting that "the fate of corporate travel management" hinges on the outcome of this GDS regulatory process, NBTA suggests in tomorrow's statement that DOT's "current enforcement mechanisms" should monitor the marketplace and give way for deregulation.
However, ASTA in June wrote, "We are aware, of course, of the 'option' of just proceeding to deregulate and relying on enforcement proceedings if marketing relationships turn out to be more than the airlines currently profess. Many parties agree that rigorous and swift enforcement is essential to protect the market, but many share our skepticism that the Department's resources, no matter how dedicated the people are, can match the task. If these issues are resolved, then a movement toward deregulation should begin. Ruden also referred to a "lack of enforcement against tying," the practice by airlines of offering corporate discounts only through their preferred GDS. It was unclear whether Ruden believes the issues now are resolved, as ASTA was unable to provide an interview on short notice.
Meanwhile, NBTA made no comment in its new statement about earlier concerns on the sale of MIDT data by GDS companies to airlines. NBTA in March said DOT should "require carriers to obtain the permission of corporations before carriers exchange or sell corporate travel data." NBTA officials were not immediately available for comment.
Industry developments--including the recent, multi-year deals that exchange airline Web-only fares and other content for GDS discounts--appear to have affected the positions of ASTA and NBTA, though neither directly said so. ASTA listed these agreements under a heading of "What has changed," and indicated that they "benefit everyone." According to NBTA, the recent deals "promise business travelers and travel managers more access."
DOT's existing GDS rules are set to expire on Jan. 31, 2004. Detailed industry commentary on the ongoing regulatory review is available by searching for docket number 2881 at: http://dms.dot.gov/search/searchFormSimple.cfm.