Worldspan Stands Firm on Deregulation in DOT’s June 9 Call for Reply Comments

Worldspan submitted a comprehensive brief to the Department of Transportation (DOT) today, further substantiating the anomalies and competitive dangers of continued or increased regulation of the computer reservations system (CRS) industry.

Caption: Paul J. Blackney
, president and chief executive officer for Worldspan

In its reply comments, Worldspan
underscores its recommendation that the DOT move toward full deregulation, either immediately or over the near term, and that the best method in transitioning from a regulated to a deregulated environment is to not impose any new rules or amendments.

Worldspan cites broad industry receptiveness to deregulation on record with the DOT
, and affirms that no evidence exists demonstrating the need for continued regulatory intervention in the current CRS/travel distribution environment. 

“Following formal, lengthy deliberation among industry participants, it remains clear that deregulation is the fastest, most efficient means of promoting healthy competition in the travel distribution marketplace,” said Paul J. Blackney
, president and chief executive officer for Worldspan. “Today, unlike 20 years ago, there is no evidence of harm requiring a comprehensive regulatory remedy. If the DOT places all parties on an equal regulatory footing, the marketplace will become the determinant of competitive winners and losers, as it should be.”

The DOT’s record acknowledges today’s larger, more diverse universe of parties with varying competitive interests, and that the fragmented CRS market exhibits fierce competition for airline, travel agency, and corporate customers. The DOT’s record also establishes that CRSs provide an excellent and efficient channel for airlines to distribute products on a broad basis and that they will continue to do so.


“Based on the record, CRSs should be viewed in the same context as the newer and increasingly influential Internet based distributors—as suppliers of goods and services to airlines,” said Blackney. “The DOT’s record does not establish that CRSs are engaged in conduct that distorts airline-to-airline competition nor that they have any incentive to do so. Certainly, it is not necessary to maintain a body of regulations based on circumstances that existed 20 years ago but that no longer exist, or in anticipation of events that are unlikely to occur. This is a real danger in maintaining or expanding CRS regulation.

“There must be evidence of both CRS power to harm competition and abuse of such power in order to justify the type and extent of regulation imposed on the industry today. Such conduct and evidence simply do not exist. More appropriate for today, if the industry were subject only to applicable antitrust, competition and consumer protection laws, the improbable occurrence of a violation could be remedied by the government on a case-by-case basis,” Blackney said.

Worldspan strongly advocated deregulation in the DOT’s initial call for industry comments in March 2003 and during the Department’s May 22, 2003 hearing in Washington, both response mechanisms for the DOT’s Notice of Proposed Rulemaking (NPRM) for CRSs issued in November 2002. Current rules, created in 1984 and last amended by the DOT in 1992, expire in January 2004.

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