In one of the strangest revelations to emerge from comments pouring this week into the U.S. Department of Transportation regarding the proposed rewriting of rules governing global distribution systems
(BTN, Dec. 9, 2002), Worldspan and its proposed new owners differ on whether Worldspan and its competitors should continue to be regulated. The current rules are designed to expire in January.
"We think the answer is yes," according to Travel Transaction Processing Corp., the group newly formed by Citigroup Venture Capital Equity Partners and the private equity arm of Toronto's Ontario Teachers' Pension Plan to buy Worldspan from its airline owners
(BTN, March 10). "Accordingly, Travel Transaction takes the broad view that the regulations should be largely kept in place with a firm sunset date in the near future." TTPC later referred to a period of "the next few years" to "allow the industry and regulators to better evaluate whether the regulatory framework should firmly sunset, be replaced or augmented with changes."
According to Worldspan, "there is no existing basis in the record or in fact to support continued regulatory intervention." Like other parties, including Sabre, Worldspan argued that the severing of airline ownership of GDSs is a major reason "it is neither necessary nor appropriate for the Department to continue to regulate the CRS industry."
A call placed to a TTPC spokesperson yesterday was not yet returned, but Worldspan senior vice president of strategic planning Jesse Liebman downplayed the difference. "When you get under the covers and focus on what they are saying, there is a lot of similarity," he said. "We both desire to see a deregulated environment. The difference is that we focus on deregulation occurring promptly and they take a somewhat different stance where they're looking for a bit more stability and evolution.
"It's more of a nuance than a difference in perspective, with respect to the timing," he continued. "We're not 180 degrees apart. Given where they are trying to conclude the acquisition, they're feeling viscerally that a stable environment is more hospitable to that."
TTPC said it would offer "new economic data that predicts how this industry will evolve, with special emphasis on ensuring the public receives unbiased data" in its final response, to be filed by the May 15 deadline for reply commentary. In the meantime, DOT plans to hold a hearing for commenters to present their arguments.