Transportation officials decide not to regulate Internet airline tickets

WASHINGTON (AP) _ Federal transportation officials say there's no need to regulate the sale of airline tickets over the Internet, giving a boost to airlines that sell tickets on the Web. <br><br>At

Wednesday, November 13th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Federal transportation officials say there's no need to regulate the sale of airline tickets over the Internet, giving a boost to airlines that sell tickets on the Web.

At the same time, the Transportation Department on Tuesday proposed easing rules for the four U.S. computer reservation systems used by travel agents so all airlines won't have to participate in all four systems.

Orbitz Inc., the online travel site owned by five big airlines _ American, United, Continental, Delta and Northwest _ welcomed the announcements, saying the new rules would boost competition.

``The agency clearly recognizes that the Internet has benefited travel distribution by increasing competition and improving offerings for consumers and travel suppliers,'' said Carol Jouzaitis, Orbitz spokeswoman.

Travel agents don't see it that way. They have accused the airlines that own Orbitz of stifling competition because they've cut commissions to travel agents and steered consumers to cheap fares available only on the airlines' own Web sites.

Last week, five California travel agencies sought class-action status for a lawsuit against Orbitz seeking commissions for sales lost to the Internet.

Orbitz is being investigated by the Transportation and Justice departments, which are concerned that it might be anticompetitive.

Sabre, one of the two computer reservation systems not owned by airlines, will fight the proposal to ease the regulations, spokesman Michael Berman said.

``It could create higher prices and less choice for consumers,'' Berman said. He said Orbitz could refuse to post fare information for smaller airlines and raise its fees.

Travel agents use computer reservation systems to look at fares and book tickets.

Transportation officials are considering eliminating two rules: that all airlines provide flight and fare information to all the computer reservation systems, and a prohibition on exclusive deals between travel agents and airlines.

The Transportation Department said it has tentatively concluded the existing rules may limit airlines' ability to bargain for better terms with the systems, and that ending them could allow market forces to provide better terms for carriers.

Consumers, meanwhile, can shop among competing Internet travel sites, officials said.

People have 90 days to comment on the proposed rules and, if they wish, to urge federal officials to regulate Internet sites.

Should transportation officials stick with their plan to not regulate the sale and marketing of online air fares, they still could enforce a ban on unfair and deceptive practices.