Originally published on February 18, 2000 and brought to you today as a time capsule.
Travel trade association the American Society of Travel Agents (ASTA) has formally requested that the U.S. Department of Justice (DOJ) block the sale of airline tickets by 27 U.S. and foreign carriers on an industry-wide Web site.
The Alexandria, Virginia-based group claims that the new site, which is slated for launch in the second quarter, would violate antitrust laws and lead to price fixing.
“This alliance of major airlines, which control 68 percent of all domestic air traffic, must be halted before permanent and irrevocable damage is done to the competitive process,” said ASTA President and chief executive officer Joe Galloway.
DOJ spokeswoman Christine Romano told the E-Commerce Times that the agency has received the request, but has yet to review the allegations by ASTA. She said that a formal request is nothing more than a communication and that the DOJ will decide whether it merits further attention.
Many industry analysts say that the new Web site, which was announced in November by United Airlines, Delta Air Lines, Northwest Airlines and Continental Airlines is designed to compete with such online travel sites as Travelocity.com.
Last month, eight other U.S. carriers signed on to the project, along with 15 foreign carriers. All have agreed to sell discounted Internet-only fares on the proposed site.
“This joint site is a clear attempt on the part of the airlines to lure consumers onto the Web with lower prices and drive all their competitors out of business, resulting in complete and total domination of the public airways,” Galloway said. “By investing in existing online travel companies and creating a conglomerate airline Web site, the airlines are attempting to drive travel agents off the Internet and increase their stranglehold on the air transportation industry.”
The Boston Consulting Group, the management team that is currently running the travel portal for the airlines, has dismissed ASTA’s complaint as having no merit.
“The Web site we are creating will be operated independently of the carriers,” vice president Ben Burnett said. “It will provide consumers with more choices and more information — not less — which will increase competition in the industry. We are creating the most comprehensive and consumer-friendly site, which will offer the broadest array of inventory, the best search capabilities and travel information on the Web.”
Offline and online travel agencies have been feeling the competitive pinch from individual airlines for some time now. While some airlines have allied themselves with high traffic online travel Web sites, others have sold tickets at drastically reduced prices on their own site.
However, if ASTA’s complaint to the Justice Department has a weak point, it may be simply that the consortium of airlines is not doing anything unique. At the moment, Expedia, Travelocity.com and a number of others are operating comprehensive online travel services.