The American Society of Travel Agents (ASTA) commended the U.S. Senate Committee on Small Business and Entrepreneurship`s joint letter to Transportation Secretary Norman Mineta urging the DOT to revisit the impact the Computer Reservation System (CRS) proposed…
The American Society of Travel Agents (ASTA) commended the U.S. Senate Committee on Small Business and Entrepreneurship`s joint letter to Transportation Secretary Norman Mineta urging the DOT to revisit the impact the Computer Reservation System (CRS) proposed rulemaking would have on small businesses.
A large majority of the travel agency community, 98 percent, are small businesses. The letter was sent and was signed by Sen. Olympia Snowe, (R-Me.), committee chair, and Sen. John Kerry (D-Mass.), committee ranking member.
The letter states:
Although DOT claims the rule is designed to help small businesses, we have heard from many representatives of the travel industry about the potential impact of this rule on small businesses, most notably travel agents. As their comments to the record will reflect, travel agencies are concerned about whether the rule will prevent or limit their access to the professional tools that are needed for them to compete.
They assert that one of the dangers of the rulemaking is that if mandatory participation is eliminated, then the airlines may withhold information from the travel agents about what flights, fares, etc. are available. Travel agents are also concerned that the proposal may eliminate bonuses and other incentives that airlines provide to travel agencies. Finally, travel agents want assurance that they will have flexibility in their contracts while maintaining a commercially reasonable relationship.
ASTA files reply comments against proposed DOT changes to CRS rules
ASTA submitted its reply comments to the U.S. Department of Transportation (DOT) concerning the DOT`s pending CRS rulemaking. After reviewing the opening comments of other parties, as well as the transcript of oral arguments held on May 22, ASTA states, We have found nothing to change our fundamental view of the problems, and opportunities, that are inherent in the rulemaking proposals issued last November.
ASTA further states, The government`s prime concern here should be to assure that independent channels of distribution survive the airlines` assault on them and are thus able to continue serving customers with independent information and booking services, not helping the airline quest to capture all the business on the Internet…. The Department therefore cannot justify draconian action against the retail distribution channel, such as termination of CRS productivity and other inducements to travel agencies, on the grounds that consumer preference for travel agents is proof of persistent market power.
The proposed CRS rule changes, last modified in 1992, would shift the balance of industry power to the major network airlines because carriers that own CRSs would be allowed to withhold flight/fare information from competing CRSs; CRSs would be permitted to price discriminate against smaller airlines; and CRSs would be forbidden from paying inducements to travel agents to acquire or use their services. The rulemaking also claims the Internet is an economically viable, readily available research and booking alternative to CRS services.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
