Computer Reservation Systems

Since first offered to travel agents in the mid-1970s, airline-owned computer reservation systems (CRS) have come to be used for more than 90 percent of travel agents' domestic airline sales. Past GAO reports have raised concerns about the restrictive marketing practices of these systems. This report examines possible biases toward the airline whose internal reservation system is housed in the CRS it owns. Such systems are called "hosted" CRSs because the internal reservation system for the airline owning the CRS is located within the CRS and uses some of the same hardware, software, and databases that operate the CRS. GAO found that differences exist in the way the design, or architecture, of CRSs treats host and participating airlines. These differences may make it easier and more reliable to obtain information and book flights on the host airline than on participating airlines. Although disagreeing on the extent and significance of existing differences, CRS vendors and airlines alike favor the elimination of any differences. A lack of current information makes it hard to know whether dehosting would eliminate significant differences in CRS treatment of host and participating airlines more effectively than would current and proposed technologies. The Department of Transportation needs to ensure that CRSs offer equal opportunities for all airlines marketing their products through such systems, including requiring CRS vendors to remove all functional differences in treatment between host and participating airlines that can be removed without dehosting.

GAO found that: (1) CRS are periodically updating central databases that provide subscribers with airfare and service information and allow them to make reservations and issue tickets; (2) CRS host and participating airlines are treated differently in terms of programming, function availability, and communication computer technology; (3) although CRS vendors and airlines disagree about the extent and significance of such differences, they generally agree that the differences should be eliminated; (4) the two largest CRS vendors and the principal airlines whose internal reservation systems they host believe that existing differences have a minimal impact on airline booking, but the vendors stated that they are taking action to eliminate such differences; (5) many airline officials and two small CRS vendors believe that the treatment differences give host airlines a significant competitive advantage over participating airlines and believe that CRS will not be fully accessible and reliable for all airlines unless they are separated from their owners' internal reservation systems; and (6) due to a lack of current information on dehosting, it is difficult to determine whether dehosting could eliminate significant differences in CRS treatment of host and participating airlines more effectively than current and proposed technologies would. GAO also found that the Department of Transportation (DOT) has not: (1) compiled sufficient CRS industry data; (2) gathered conclusive data on the extent of reliability problems in the transmission and processing of data between CRS and participating airlines; and (3) gathered objective data on the potential costs of dehosting to CRS vendors, airlines, and air passengers.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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