Air Transport World

The revolution deferred: the US government's decision to end nearly 20 years of regulating computer reservations systems will have little immediate impact on the market.(Distribution)

Late in the afternoon of a dreary but mild New Year's Eve, the US Dept. of Transportation announced that nearly two decades of government regulation of the airline industry's electronic ticket distribution were coming to an end. Most of the usual Washington-watchers had headed off to homes or parties and it was days before most people noticed DOT's quiet, stealth-like announcement of the pending demise of the "CRS rules."

The term itself is a bit of an anachronism dating from the original adoption of the rules in 1984 by the now-defunct Civil Aeronautics Board. The industry long since had evolved from "computerized reservations systems" to the grander "global distribution systems" or GDSs. It took a 254-page document to communicate that most of the rules would be allowed to sunset on Jan. 31. Two others that ban display bias and prohibit certain types of clauses in GDS companies' contracts with airlines were readopted for a six-month transition period ending July 31.

January 31 came and went just as quietly as DOT's holiday announcement. "We jumped the gun," says Sabre Travel Network Senior VP Hugh Jones. "We had already made our move in anticipation of deregulation." That move was the creation of a new level of Sabre participation called Direct Connect Availability Three-Year Option. The program, launched in October 2002 and nicknamed DCA-3, locks participants into a three-year contract rather than the usual month-to-month arrangement. It generally reduces participating airlines' segment fees by about 12%--although it is rumored that one or two carriers negotiated better terms--and locks in the rate for three years. In return, airlines must provide all their published fares--including the special Internet-only fares that they had used to lure consumers to their own websites, their lowest-cost distribution channel.

Galileo offers a similar explanation for the lack of any discernable impact. "The industry and all its participants anticipated deregulation," says Ken Esterow, executive VP-supplier services for Cendant Travel Distribution Services, which includes the Galileo GDS. …

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