Airlines Reject DOT GDS Mandate

Airlines for America (A4A) released a letter to Ray LaHood, secretary, Department of Transportation (DOT), opposing any efforts by the DOT to mandate that airlines serving the U.S. distribute all content and services though global distribution systems (GDSs).

Signed by major international airline associations, including IATA, the letter asked the DOT to "refrain from introducing a new regulatory regime whereby airlines would be obliged to contract with GDS."

The nine associations represent virtually all of the commercial scheduled passenger airlines that fly into or out of the United States on a daily basis, A4A said. "We are writing to express our united concern regarding any proposal by the U.S. DOT to mandate that airlines serving the United States distribute all content and services though global distribution systems (GDSs)."
"We recognize that DOT is committed to ensuring that airline passengers have the  information they need to make informed decisions on their air travel purchases. Our member airlines strongly support that principle. Today, passengers have access to more information than ever before presented to them in advance of their ticket purchase, through carrier websites, reservation phone lines, airport kiosks, online travel agencies and third party websites that compare and contrast airline service offerings. DOT’s Consumer Rule 1 and Consumer Rule 2 codify the guarantees that airlines have already made to their customers to provide the information they need for their purchases in a timely and coherent manner. Carriers are perfectly incented to provide information on the services they offer in a way that allows customers to make informed decisions in as seamless a manner as possible," the letter said.
"However, this shared commitment to transparency cannot justify a government mandate that airlines contract with GDSs to distribute all airline content and services via that channel. Instead, airlines should continue to have the right to utilize any distribution channel they chose as long as in doing so they meet the letter and spirit of this shared commitment to transparency."

"Mandating that airlines distribute all of their content through a GDS monopolist will result in significant consumer overcharges. GDS suppliers can be up to 80 percent more expensive than other equally transparent distribution channels. The proposed DOT mandate will invariably lead to a reduction in competition and technology innovation, while increasing the price of tickets for the end-user consumer. Furthermore, we do not believe it is appropriate for DOT to interfere in contractual relationships between airlines and GDSs, particularly at the present time when there is pending litigation in this area," A4A said.
"We urge you and your department to refrain from introducing a new regulatory regime whereby airlines would be obliged to contract with GDS. Doing so would only serve the needs of monopoly suppliers at the expense of consumers, the airlines that serve them and the technology companies that are offering more robust and cost effective GDS alternatives," A4A said.


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