Delta Air Lines and Utah's largest travel agency, Morris/Ask Mr. Foster, say complaints registered with federal authorities by 22 local travel agencies violate the rules of a deregulated market.
"It appears that the complainants are unwilling to meet the challenges of a free and open market," Morris said in a filing with the Department of Transportation.The document responds to a complaint filed with the DOT earlier this month by 22 Utah travel agencies. The group accuses Delta and the state's "Big Three" agencies - Morris, Murdock Travel and Beehive-Bonneville Travel - of conspiringto put their smaller competitors out of business by engaging in anti-competitive arrangements with Delta.
Murdock and Beehive-Bonneville have also filed answers to the complaint, denying the allegations and requesting that the complaint be dismissed.
"The complaint requests the Department of Transportation become involved in a number of areas that should be governed by the marketplace rather than by regulatory action," Delta said. "Further, DOT involvement in many areas covered by the complaint was prohibited by the spirit and letter of the Airline Deregulation Act of 1978."
The 22 agencies, organized under the name Independent Travel Agency Alliance, claim Delta has given preferential treatment to the "Big Three" through discounted sales of Delta's computer reservation system and providing exclusive bulk or tour-based fares.
The alleged discriminatory practices have caused a 30- to 50-percent reduction in revenues of the alliance's members, the complaint said, and threaten their existence.
Delta controls more than 70 percent of the commercial air traffic at Salt Lake International Airport, the alliance claims, and the "Big Three" agencies control about 65 percent of the local travel business market.
In their responses, Delta denies controlling 70 percent of the air travel market in Salt Lake, and none of the defendant travel agencies state their market share.
All three agencies admit to purchasing Delta computer reservation systems, but they all claim in separate answers to have done so independently and deny conspiring together to eliminate competition.
Delta said it expects to receive financial benefits if Morris, Murdock and Beehive use the reservation systems but denies the complaint's allegations of $1 million in annual savings. The airline and "Big Three" also deny most or all of the various perks the agencies received for using the Delta system.
The alliance accuses Delta of sellingbulk or tour-based fares exclusively to the "Big Three," who in turn use them not for the intended leisure market, but to steal away the smaller agencies' corporate clients.
Delta said it doesn't know how the tour-based fares were marketed by the "Big Three," but the agencies denied using the low-priced packages to lure corporate travel clients.
"The (DOT) should not become involved with airlines' decisions to offer or not offer tour operator fares, the level of those fares, or the methods by which those fares are marketed," Delta said.
"The (DOT) also should not become involved in the methods through which airlines distribute their services, including the relationships between airlines and travel agencies, tour operators and other marketing channels."
A DOT spokesman said the department has 60 days to decide how to proceed with the case - whether to dismiss it or appoint it to an administrative law judge for hearings.
He said this is not the first complaint from travel agencies involving airlines and their computer reservation systems, and the DOT may consider seeking a general ruling on the issue by grouping that area of the complaint with similar ones filed previously.