Comments on 'Airline Competition Enhancement Act of 1992'

T-RCED-92-71: Published: Jun 18, 1992. Publicly Released: Jun 18, 1992.

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GAO discussed the impact of the proposed Airline Competition Enhancement Act on airline-owned computerized reservations systems. GAO noted that: (1) airlines owning systems have benefited from substantial shifts of traffic and revenues from airlines that do not own systems and from airlines owning smaller systems; (2) the Department of Transportation (DOT) does not collect sufficient data about market shares or travel agent booking patterns to allow more precise estimates the systems' effects on traffic and revenues; (3) some recent changes in ownership and technology may have reduced some anticompetitive effects; (4) the lack of current data on market shares makes it difficult to evaluate the cost-effectiveness of proposed solutions to anticompetitive problems; and (5) DOT has not moved expeditiously in finalizing new rules that would reduce anticompetitive effects. GAO also noted that the proposed legislation would address areas not yet addressed in DOT rules regarding: (1) eliminating functional differences between host and participating airlines; (2) allowing travel agents to use personal computers to access multiple systems; (3) prohibiting contracts of more than 3 years, automatic contract extensions, excessive liquidated damages clauses, and minimum use provisions; and (4) arbitrating booking fee increases. GAO believes that DOT should be required to collect data to support the evaluation of systems' effectiveness and anticompetitive effects.

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