uch. Looking at ARC's report on the
year just ended, we find that travel agents remitted a mere $64
billion in airline sales to ARC in 2002, almost $20 billion less
than in the record year of 2000.
That can't be good, right?
We also see that ARC counts 24,797 retail locations at the end
of 2002, down from 30,077 two years ago.
That can't be good, either, right?
Well, it's not good for ARC. Having gone to great lengths to
automate its systems to handle an ever-increasing transaction load,
ARC now finds it is servicing 18% fewer accounts and handling 23%
less money than it was a while ago. That's not good for a
clearinghouse whose stated goal is efficiency.
As for agents, we have all come to realize the ARC numbers don't
tell the whole story.
Airline ticket sales reported through ARC now account for less
than half of the total sales activity of the nation's travel
sellers, virtually all of whom have more profitable things to do
these days than sell air.
• • •
Ugly alliance
e are of two minds about the
emerging alliance involving Continental, Northwest and Delta. We're
not big fans of bigness, but in a deregulated market, we regret to
acknowledge that the airlines ought to be able to form any kind of
alliance -- as long as they don't violate the antitrust laws.
The Transportation Department, however, doesn't see it that way,
and imposed some ad hoc conditions on this deal that go beyond the
conditions laid down by the Justice Department's antitrust
division.
Usually, when the DOT imposes conditions on airlines, the
carriers comply. But this time, the three alliance partners said
they won't abide by all of them. The DOT promises an enforcement
proceeding.
Such open defiance is rare and troubling, but we also are
troubled by the DOT's attempt to regulate the way airlines
compete.
Among the broken promises of deregulation was the idea that
airlines would be treated "just like any other business." If three
widgetmakers proposed a marketing alliance, they would have to pass
muster with the Justice Department, and that would be the end of
it. Shouldn't that be the case with airlines?
A few years ago, the DOT tried to limit the ways big airlines
could respond to new entrants and low-cost carriers.
Notwithstanding our fondness for new entrants and low-cost
carriers, we said at the time in this space that the DOT had no
business imposing a double standard on the big airlines.
We'll say it again: Notwithstanding our great skepticism about
these alliances, the DOT has no business imposing a double standard
on the big airlines. If the Justice Department says this ugly
alliance does not violate the antitrust laws, that should be the
end of it.