Computer Reservation Systems:

Action Needed to Better Monitor the CRS Industry and Eliminate CRS Biases

RCED-92-130: Published: Mar 20, 1992. Publicly Released: Mar 20, 1992.

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Pursuant to a congressional request, GAO reviewed airline-owned computer reservation systems (CRS), focusing on whether: (1) differences in CRS treatment of host and participating airlines allowed the CRS-owning airlines to sell additional seats at other participating airlines' expense; and (2) separating owner-airlines' internal reservation systems from CRS, or dehosting, would eliminate significant differences in CRS treatment of host and participating airlines more effectively than existing or proposed CRS technology improvements.

GAO found that: (1) CRS are periodically updating central databases that provide subscribers with airfare and service information and allow them to make reservations and issue tickets; (2) CRS host and participating airlines are treated differently in terms of programming, function availability, and communication computer technology; (3) although CRS vendors and airlines disagree about the extent and significance of such differences, they generally agree that the differences should be eliminated; (4) the two largest CRS vendors and the principal airlines whose internal reservation systems they host believe that existing differences have a minimal impact on airline booking, but the vendors stated that they are taking action to eliminate such differences; (5) many airline officials and two small CRS vendors believe that the treatment differences give host airlines a significant competitive advantage over participating airlines and believe that CRS will not be fully accessible and reliable for all airlines unless they are separated from their owners' internal reservation systems; and (6) due to a lack of current information on dehosting, it is difficult to determine whether dehosting could eliminate significant differences in CRS treatment of host and participating airlines more effectively than current and proposed technologies would. GAO also found that the Department of Transportation (DOT) has not: (1) compiled sufficient CRS industry data; (2) gathered conclusive data on the extent of reliability problems in the transmission and processing of data between CRS and participating airlines; and (3) gathered objective data on the potential costs of dehosting to CRS vendors, airlines, and air passengers.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The CRS controversy has abated and neither Congress nor the Administration are pursuing this recommendation further at this time.

    Matter: Congress should direct the Secretary of Transportation to revise existing DOT CRS rules to require that each CRS vendor eliminate those functional differences between host and participating airlines that can be eliminated without dehosting. If vendors assert that proprietary data are necessary to eliminate some differences, such as checking passenger name records and frequent flyer numbers, the burden of proof should be on the vendors to demonstrate that such differences in treatment can not be eliminated without access to proprietary data.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Although DOT did not concur in the recommendation, it recently issued new rules governing CRSs. The rules include requiring identical procedures for loading data supplied by vendors and participating air carriers; eliminating defaults in favor of vendor airlines; and ensuring equal availability of enhancements.

    Recommendation: The Secretary of Transportation should gather data both on the technical reliability of data communication linkages used by participating airlines, as compared with the internal linkages used by host airlines, and on the costs and benefits of dehosting CRS.

    Agency Affected: Department of Transportation

  2. Status: Closed - Not Implemented

    Comments: The CRS controversy has abated and neither Congress nor the Administration are pursuing this recommendation further at this time.

    Recommendation: The Secretary of Transportation should establish a comprehensive and continuous program of gathering data on the CRS industry, including gathering data on market shares of CRS vendors and on booking patterns by travel agents using the various CRS.

    Agency Affected: Department of Transportation

 

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