| Summary: | 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.
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