American Airlines applauds the US Department of Transportation for proposed revision of CRS rules

American Airlines today commended the Department of Transportation for its proposed revised Computer Reservations System (CRS) rules released today.

While it will take some time to review the DOT’s notice of proposed rule making (NPRM) document, American applauded the DOT’s courage in proposing to eliminate the existing mandatory participating rules and prohibition of discriminatory booking fees. The airline also said it was pleased that the DOT recognized that "parity clauses" in CRS contracts with airlines are inconsistent with the elimination of these rules, and urges the DOT to prohibit all such clauses in its final rule. Together, these actions will help unleash real price competition among CRSs, which should drive down distribution costs.

While it is much too early to estimate distribution cost reductions from real CRS price competition, the potential for savings is substantial. Distribution is one of American’s biggest expenses, behind only wages/benefits and fuel. Last year alone, American’s CRS expenses were in excess of $400 million.

The airline also applauded the DOT for proposing not to regulate ticket sales via the Internet. Regulation would unnecessarily stifle this dynamic and growing marketplace for travel, just as more consumers are benefiting from shopping online for airline service. The DOT’s call for case-by-case reviews instead of full regulation is the sensible approach.

The Department of Transportation’s rules demonstrate both balance and courage in eliminating outdated regulations and relying instead on the free market to increase efficiency, improve service and reduce costs.