In the bowels of Brussels, buried deep within the European Commission (EC), there's a bureaucracy within a bureaucracy, one you may never have heard of. It's called DG-TREN - the Commission's department of transportation and energy. DG-TREN is run by a cadre of professional technocrats who propose to if not kill them altogether, at least to re-write the rules governing Computerised Reservations Systems (CRSs).
For the past 18 years, the EC's CRS Code of Conduct has protected purchasers of travel, corporate and leisure flyers alike. Now, that protection is poised at the precipice.
Over the next several weeks the Business Travel Coalition (BTC) will examine the issue, chronicling the context of current CRS regulations, defining how the European Union market differs from that in the United States, and, finally, taking a long, hard look at what partial, or wholesale, CRS deregulation could mean to European business travellers.
CRSs, also known as Global Distribution Systems (GDSs) are essentially back-end databases. which encompass the schedules, pricing, and inventory of the world's airlines, hotels, and car rental companies.
The CRSs pull this data together and then deliver them to both brick-and-mortar and online travel agents. The way the data are arranged, dissected, and presented makes a world of difference.
There are three principal CRSs out there: Amadeus, Sabre and Galileo which has just bought what was the fourth, Worldspan - and all of them owe the reason for being, to the airlines.
In the mid-1970s, some carriers started to extend the reach of their internal reservations systems to travel agencies, giving them their first automated ability to create reservations electronically. The result was a revolution in efficiency, coming as it did about the time airline deregulation was set to take off in the United States. This permeation of airline reservations systems, this penetration into the agency environment, gave birth to electronic travel commerce as we know it - or at least knew it.
The lineage of today's CRSs traces directly back to some of the biggest names in the business. Sabre began life as a part of American Airlines. Galileo was ushered in by United - and later nourished by Swissair, KLM, Alitalia, and British Airways. Amadeus was a creation of Lufthansa, Air France, and Iberia. Worldspan was given birth by now defunct Trans World Airlines, and later reared by Delta and Northwest.
So fast, so furiously, did CRSs grow that by the late 1980s almost 100% of travel agencies in the US were connected at the hip to their GDSs. That's because travel agencies began not just to make bookings and issue tickets through CRSs, but run their financial and administrative records through them as well.
Wherever commerce goes there are those who will attempt to coerce it. That's what happened with CRSs. Airlines that owned the systems proceeded to manipulate on-screen flight and fare information. The idea was to create an advantage over non-CRS-owning competitors, many of them low-fare, new-entrant airlines.Â
When you walk into a bookstore you tend to look first at the rack of bestsellers, books positioned in the front of the store. That's what CRS-owning airlines did with their flights and fares - they put them on the first displays, the ones that popped up first on travel agents' screens. Other flights, other fares, fielded by competitors got relegated to more obscure screens - in the back of the store. The result was bias.
That bias wasn't confined just to displays. CRSs historically made their money by charging carriers segment fees. Each time a travel agent booked a flight on an airline, that carrier had to pay the CRS a fee. The problem was that those fees varied considerably. Airlines that were members of "the club", usually those which owned CRSs, paid a nominal fee, 25p per booking. Outsiders, such as now defunct New York Air, however, paid through the nose, forking out over £2 per flight segment.