D-day for proposed new GDS rules draws near

Sunday, 22 Sep, 2003 0

It is now just a matter of weeks, rather than months, before the US Department of Transport announces its verdict on its proposed GDS rule revisions.

And many influential bodies and companies – including Sabre, Worldspan and the American Society of Travel Agents (ASTA) – are concerned that the DoT is going to opt for a change to the existing rules rather than complete deregulation of the industry.

If they are proved right it could be bad news for many agents in the US – who would be likely to lose one of their remaining revenue streams. The new rules would ban many incentive payments between GDSs and agents and would also place time restrictions on their contracts.

Such is the concern that ASTA and Sabre are planning to demonstrate against the proposed changes in Washington later this month (Sept 25).

Speaking from the US, Sabre Holdings senior vice president government affairs Bruce Charendoff told TravelMole: “We find the DoT’s suggestion to up-end the current regulatory regime objectionable. We would much rather compete in a free marketplace. It is proposing to put its thumb on the scale to tip the balance in favour of the airlines.”

Mr Charendoff said that the proposed changes would shift sales away from high street travel agents and towards airlines and the internet. He pointed out that with the move to zero commission the incentive payments agents received from the GDSs was “one of the few revenue streams that they have left.”

He argued that some customers would always want the face-to-face contact of dealing with an agent in person and the new rules, which would make it harder for agents to survive, would take this choice away from them.

Meanwhile in contrast to Sabre and Worldspan, Galileo believes that the existing rules should be maintained in both the US and Europe until there is an “equal playing field” between all the GDSs. A spokesman told TravelMole that while Amadeus was still partly owned in Europe by Iberia, Lufthansa and Air France the existing rules should stay.

Similar changes to the rules governing GDSs are also being considered in Europe, where the findings are expected to closely follow those of the US.