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GROUP URGES ACTION ON COMPUTER RESERVATIONS SYSTEM RULES

 GROUP URGES ACTION ON COMPUTER RESERVATIONS SYSTEM RULES
 ATLANTA, March 2 /PRNewswire/ -- In comments filed today with the U.S. Department of Transportation, a broad-based group of airlines, computer reservations system (CRS) vendors, travel agency organizations, and consumer groups urged quick action by the department on CRS rules intended to enhance the competitive integrity of the air transportation industry.
 The group included Alaska Airlines, America West Airlines, Association of Retail Travel Agents, Aviation Consumer Action Project, British Airways, Consumer Federation of America, Continental Airlines, Delta Air Lines, KLM, Northwest Airlines, System One Corporation, Trans World Airlines, and Worldspan Travel Agency Information Services.
 The filing was prompted by President Bush's request that many U.S. government departments and agencies review existing programs and "weed out unnecessary and burdensome government regulations which impose needless costs on consumers and substantially impede economic growth."
 In its comments, the group said, "... continued CRS regulation is essential to foster growth, protect consumers, and ensure the benefits of the competitive marketplace in air transportation."
 Government rules on the operation and marketing of computer systems owned by airlines and used by travel agents to book air travel were first instituted in 1984. The Civil Aeronautics Board found the systems were heavily biased toward the owning airline and funneled hundreds of million of dollars in air travel revenue away from competing carriers. The CRS rules outlawed the more blatant forms of bias and have been credited with greatly enhancing airline competition. Responsibility for enforcing the rules was transferred to the DOT at the end of 1984.
 In 1989, the DOT announced that it had tentatively decided to renew the existing rules, which were to have expired on Dec. 31, 1990, but that some provisions of the rules required strengthening to further enhance competition. To give itself more time to analyze the travel industry and the impact of CRS on airline competition, the DOT extended the expiration date of the rules to Nov. 30, 1991, and again to May 31, 1992.
 The group now urges the DOT to reaffirm that the CRS Rules are conducive to a healthy economy, to complete the rulemaking by May 31, 1992, and to strengthen the CRS Rules in order to better protect consumers and secure the efficiencies of a competitive air transportation marketplace.
 "The major underlying reasons which prompted the CRS Rules in 1984," the group said, "have not materially changed. CRSs are still dominated by airlines, and the network of common industry travel agencies still relies heavily on CRSs. To lessen the safeguards in the CRS Rules would impose significant costs on society; would create unacceptable uncertainties for airlines, CRSs, and travel agencies; and would impede the functioning of market mechanisms. Reducing the existing CRS Rules would invite the return of past anticompetitive practices, and strengthening the rules is needed to further protect consumers."
 The filing points out that the U.S. Department of Justice (DOJ) also believes retained and improved rules are needed. In a 1989 filing with the DOT, the Justice Department said, "Although the CRS Rules have been successful in preventing certain types of anticompetitive behavior by the CRS vendors, the vendors continue to possess market power, especially with respect to the provision of CRS services to airlines." In calling for strengthened CRS Rules, DOJ specifically concluded that the "Current CRS rules have not been successful in preventing the CRS vendors from exercising their market power in ways that substantially harm air transportation consumers...." In comments filed in July 1991, DOJ said vendors exercise market power, "by biasing the architecture of their systems in favor of their own airlines' flights, which diverts passengers away from competing airlines without regard to quality of service."
 "The views of DOJ," the group's filing said, "are echoed throughout the DOT's own Notice of Proposed Rulemaking. Page after page, in paragraph after paragraph, the notice explains how the current rules have not adequately eliminated bias in favor of host airlines, and how other practices permitted by the current rules have inhibited competition for CRS services and distorted competition in air transportation. In its Regulatory Impact Analysis, the department shows clearly how the benefits of revised CRS Rules will far outweigh regulatory costs."
 Atlanta-based Worldspan Travel Agency Information Services has been a leading advocate of a more competitive CRS industry, and Chief Executive Officer Cal Rader urged the DOT not to weaken its resolve in that respect.
 "The critical role travel agents play in the world's economy mandates a CRS industry free of all bias," he said. "As the airline industry continues to consolidate, the travel agent's need for a neutral source of information becomes even more acute. When enacted, the CRS rules moved the travel industry much closer to a competitive balance. It's now time to complete the process."
 -0- 3/2/92
 /CONTACT: James H. Lundy of Worldspan, 404-916-7403/ CO: Worldspan Travel Agency Information Services ST: Georgia IN: AIR SU:


BR-BN -- AT012 -- 3993 03/02/92 13:00 EST
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Date:Mar 2, 1992
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