Airline Competition: Impact of Computerized Reservation Systems
RCED-86-74
Published: May 09, 1986. Publicly Released: May 09, 1986.
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Highlights
Pursuant to a congressional request, GAO examined the effects of airline-owned computerized reservation systems (CRS) on competition in the airline industry, focusing on: (1) conflicting studies on system profitability conducted by two system-vendor airlines and a consultant; and (2) a Department of Justice report on the structure and performance of the market.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | The Secretary of Transportation should undertake the two studies regarding the persistence of incremental revenues and the effect of booking fees on competition, and take additional action, if warranted by the results of the studies, to enforce compliance with or to strengthen the computerized reservation system rules. |
Closed – Implemented
The Department of Transportation (DOT) is completing its data collection effort and has begun sifting through the data collected. A report was issued in May 1988 as a result of congressional hearings. DOT is required to report monthly, beginning in November 1988.
|
| Department of Transportation | The Secretary of Transportation should report to the concerned committees of Congress on the results of the studies and any actions planned. |
Closed – Implemented
Issues were further studied and included in the DOT report on curline competition issued in February 1990. A notice of proposed rulemaking is being developed to modify current CRS rules which expire at the end of the year.
|
| Department of Transportation | To assess the possible persistence and size of incremental revenues, DOT should study the behavior of individual travel agents who subscribe to different system vendors in the post-rule period. |
Closed – Implemented
The collection effort was completed and a report was issued in May 1988.
|
| Department of Transportation | To assess the anticompetitive effects of booking fees, DOT should examine the potential anticompetitive effects of these fees in specific types of air travel markets. The study should also examine the likely impacts of possible remedies to the anticompetitive effects of booking fees. |
Closed – Implemented
The collection effort was completed and a report was issued in May 1988.
|
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Topics
Accounting proceduresAirlinesAntitrust lawCompetitionInformation systemsRegulatory agenciesRestrictive trade practicesTrade regulationTravel agentsProfits