Antitrust and regulatory aspects of airline computer reservation systems.
Degree GrantorUniversity of Canterbury
Degree NameMaster of Commerce
The influence of laissez-faire ideology on economic policy in recent years has been profound. Proponents of this form of economic liberalisation rely heavily on antitrust, also known as competition law, to fill the void left by dismantled regulatory regimes. In most situations, antitrust law provides a mechanism which ensures that markets operate on a competitive basis and thus maximise the welfare of society. However, in some industries, antitrust law is not sufficient to promote and foster workable competition. This is of particular concern where the uncompetitive industry has the potential to adversely affect a neighbouring or related industry. This research analyses the computer reservation system industry in Europe, North America and Australasia. It looks closely at the competitive difficulties of the CRS industry and explains how these difficulties affect two related industries-air transportation and travel agencies. A number of conclusions and policy recommendations emerge. The triangular relationship of inter-dependence between the CRS, air transportation and travel agency industries makes CRS vendors unusually resistant to conventional regulation. Neither antitrust law nor direct industry regulation are completely effective at preventing airlines which own CRSs from exploiting their competitive advantage in one industry in ways which anti-competitively affect trade in other industries. The research concludes that for the Australian and New Zealand markets, a blend of competition law and light-handed regulation is appropriate. For the United States market, increased antitrust enforcement by the correct agencies combined with active regulatory threats is required to create a fair air transportation market. The thesis recommends a consistent world-wide code of conduct to promote global airline competition. Such a code could then be adopted by individual states and complemented by their competition law legislation.