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News Release
June 6, 2003
CONTACT: David Fish
(202) 289-8928

DOT Challenged to Deregulate
Air Travel Distribution

New Paper Contains Transcript of Industry, Other Experts

WASHINGTON, D.C. - Travel industry and policy experts in a recent panel discussion agreed the U.S. Department of Transportation should reduce regulations on the nation’s air travel distribution system, given competition brought on by the Internet and related technology. Their views, as stated at a May 9 conference, are captured in a transcript released by The Progress & Freedom Foundation, which hosted the event.

The experts: William Adkinson, Jr., senior policy counsel, The Progress & Freedom Foundation; Gary Doernhoefer, VP and general counsel, Orbitz; Stephen Sawyer, assistant general counsel, United Airlines; Steven Salop, professor of economics and law, Georgetown University Law Center and Thomas M. Lenard, VP for research and senior fellow at The Foundation, who served as moderator.

Lenard raised the important questions: “Is there a market failure that justifies continuing these regulations? Or should the Bush Administration take this opportunity to deregulate and allow them to expire?” Adkinson urged “the DOT to end CRS regulation and move to an entirely different framework, one where specific competitive issues can be dealt with through individual investigations but where there is an end to pervasive regulation.” He said, “market forces are sufficient to protect competition” and argued, “it is critically important that market players be given maximum freedom to pursue opportunities that will benefit consumers.

Doernhoefer said, “the DOT is heading in the right direction in deregulating the CRS industry,” but that he would not “simply sweep aside all the regulations immediately” because “they would be in a position to erect new barriers to entry.” Sawyer argued “the CRS rules have outlived their usefulness and that we should emerge now into an era where we’re free of those regulations and able to compete freely in terms of the distribution of air transportation services.” Salop said that “instead of increasing regulation or selectively eliminating it, the DOT ought to deregulate at least the independent CRSs and WorldSpan when it spins off or, if necessary, even deregulate everyone now and rely on the antitrust laws.”

The Progress & Freedom Foundation is a market-oriented think tank that studies the impact of the digital revolution and its implications for public policy. It is a 501(c)(3) nonprofit organization founded in 1993.



The Progress & Freedom Foundation