- The Washington Times - Monday, August 4, 2003

The Department of Transportation (DOT) would sacrifice U.S. travel agents in order to promote the recovery of the major airlines. Through a series of intrusive computer reservation system (CRS) rules, DOT would invalidate our private contracts and eliminate critical revenue sources that keep us in business. This policy is absurd, especially coming from the Bush administration, which claims to support deregulated markets. Apparently, DOT didn’t get the memo.

CRS is the database network that automate travel agencies and allow us to search and book travel services. The CRS rules were adopted 20 years ago to protect competition and consumers from the major airlines, which at the time owned all the computer reservation systems and used them to pummel rival airlines.

Here’s the thing: U.S. airlines are now completely out of this business. They have sold their stakes in the computer reservation systems. The rules are now irrelevant. But instead of stepping aside, DOT has so far determined to keep on regulating, and now it is proposing to turn these rules upside down at our expense.

DOT would interfere in the private contracts between travel agencies and independent CRS companies. By outlawing incentive payments and dictating the length of contracts, DOT hopes to break the link between travel agents and CRS companies to benefit the airlines. DOT wants travel agents to bypass CRS and log onto the airlines’ Web sites and airline-owned Orbitz, which DOT would inexplicably exempt from the rules. DOT also calculates that its rules would increase the airlines’ bargaining leverage to reduce CRS booking fees. This blatant misuse of regulatory power is breathtaking.

Even still, DOT’s approach is completely unnecessary. The airlines are already running Web sites that are challenging travel agents and CRS. And in recent weeks, virtually all of the major airlines have signed long-term distribution deals with CRS companies that will reduce their booking fees significantly, in exchange for all the airlines’ fares and inventory. These deals are a major win for everyone in the industry and prove that the marketplace is creating positive solutions without the need for intrusive rules. Consumers have an unprecedented choice of places to buy air travel — on the Web, through a travel agent, on the telephone or through a wireless device. You can name your own price, take your air a la carte or with hotel and car in a package, or simply call your travel agent, who will take care of everything. Why in the world would DOT slow the pace of this dynamic market?

DOT, which seems to have an encyclopedic understanding of the major airlines’ challenges, doesn’t have the slightest clue about the travel agency business or the consumers we serve — even as it sees fit to regulate our industry into extinction. The 62 triple-spaced pages of DOT’s meandering, mostly incomprehensible rule-making, betrays the fact that this agency has not even tried to keep up with major developments in the travel distribution industry during the six years this rule-making has dragged on. DOT doesn’t know how travel agencies automate, the nature of our relationship with CRS companies, the challenges we face in this difficult economy and the value of the services we provide to our customers.

And it hasn’t even bothered to consider the impact of its proposed rules on small businesses, as the law requires. This point was underscored when DOT ducked a recent House Small Business subcommittee hearing, which was held to take DOT to task for this failure. A parade of travel agents came forward to tell Congress in graphic detail how these rules would devastate their businesses.

Travel agents are not asking for a regulatory handout. Quite the opposite, we are asking for true deregulation and a fair opportunity to run our businesses free of government interference. Instead of imposing CRS rules that are out of touch, paternalistic and counterproductive, the government should deregulate the CRS industry. And DOT should do it now, not after lengthy transition periods with imbalanced transitional rules. This is in the best interests of consumers and all travel industry participants. It is also consistent with the administration’s deregulatory program. Transportation Secretary Norman Mineta ought to check his inbox — the memo’s there.

Terry McCabe is president of Stratton Travel Management.



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