Mr. Marc-André Charlebois
President and CEO
Association of Canadian Travel Agencies
130 Albert Street
Ottawa, Ontario K1P 5G4

10 February 2004

OPEN LETTER

Dear Mr. Charlebois:

Words cannot begin to describe the damage inflicted on Canadian travel agencies by ACTA yesterday at the Public Hearing on CRS Rules. It is simply no wonder that the Government is hard pressed to take the views of travel agents seriously when one of its trade associations, ACTA, without explanation, completely reverses its position on CRS regulations.

Even the Honourable Jim Karygiannis, Chairman of yesterday's hearing, was perplexed by ACTA's 180 degree about-face when ACTA first vehemently criticized Transport Canada's proposed amendments to the CRS rules, and then yesterday, less than 30 days later, completely supported Transport Canada's call for near total deregulation of CRSs in Canada.

The regime which ACTA now surprisingly supports will allow a dominant airline like Air Canada to withdraw at will from any and all CRSs and facilitate forcing agents and consumers to buy Air Canada services solely from Air Canada's web site. Report after report, speaker after speaker, warned yesterday that while commercial interests at CRSs themselves supported total deregulation, all were concerned that only the Competition Bureau could assure that Air Canada would not abuse its dominant position through a destruction of the CRS industry in Canada.

Even Galileo, once owned by Air Canada and all too familiar with Air Canada's management and strategy, warned Transport Canada yesterday that any amendment to the CRS regulations in Canada which would allow Air Canada and other legally obligated carriers to remove themselves from CRSs would have devastating consequences for both consumers and travel agencies.

When Transport Canada issued its proposed CRS amendments, ACTA said:

"ACTA did not expect to see the rules completely gutted and almost exclusively designed to favor the airline industry. We are of the view that this consultative process has not addressed any of our concerns and recommendations ... we are of the view that when there is a reasonable risk that a dominant player, or an oligopoly of players, may adopt un-business like practices in an unregulated market, regulations should be in place."

With specific reference to obligated participation of carriers like Air Canada in CRSs, ACTA said:

"To provide the strongest carriers in a market with the option of participating in only one GDS or none at all will unsettle the marketplace. The retail travel industry and customers expect fair and unbiased information as a basis for selling air travel. Indeed, the uniformity of display is only as good as the information provided by the airlines to the CRS and in turn, provided to the agent and their clients. Complete flight and fare information must remain in order for the CRS to remain a trusted and utilized resource for the retail travel industry."

As late as 14 January 2004, ACTA told its members that it had "squared off" with Department of Justice and Transport Canada officials "demanding" that they go back and revisit the proposed amendments and reconsider the recommendations which ACTA had put forward. ACTA even praised and welcomed the opportunity to participate in the public hearing which, in all modesty, was solely the direct result of CSTAR's efforts to get Parliament to intervene.

Thus, you can appreciate our dismay, if not all-together astonishment, that ACTA now supports sweeping CRS deregulation. When Mr. Karygiannis pressed you, several times, to explain ACTA's astounding reversal of position, your only reply was that the marketplace had "dramatically changed". In less than 30 days? How so? What change in the marketplace could possibly account for ACTA's precarious, if not embarrassing, flip-flop in the CRS matter?

One can only speculate who, what, or which of ACTA's airline members helped persuade or cajole ACTA to so completely disregard its prior position and, at the same time, destroy any credibility which travel agencies have in the halls of Government.

What is not up for speculation is that ACTA's incongruous position was, as ACTA admits, the result of support from the ACTA board and several key stakeholders with whom ACTA consulted. Yet, while ACTA stated at the hearing that it was there to represent the interests of 2,400 ACTA member travel agencies, it is all too clear that ACTA's rank and file membership was never consulted regarding this dramatic and abrupt change.

What is equally clear is that the sole agency beneficiaries of ACTA's reversal are the large and powerful mega-agencies, all of which will be able to negotiate the necessary commercial terms with and build the required technology links to Air Canada's inventory outside the CRS channel of distribution. It is no wonder that yesterday's presentation by the Canadian Corporate Travel Association, touting its ACTA membership, completely supported ACTA's call for CRS deregulation.

ACTA's utter disregard yesterday for the welfare and sustainability of Canada's small-to-medium size travel agency community is a sad testimony to ACTA's ongoing charade in representing the real interests of the majority of its members. By all accounts, and with CSTAR's first-hand knowledge, hundreds of e-mails were sent by travel agencies to both Transport Canada and Mr. Karygiannis protesting the proposed amendments. It is simply not possible that ACTA could have any reasonable basis, nor any mandate from its general membership, to justify its dramatic reversal in the CRS matter.

ACTA's testimony yesterday was an assault on the very rank and file agency community which ACTA purports to represent, and as such, a betrayal of its promise to defend the interests of the retail travel services industry.

I am only sorry that I am not an ACTA member, for otherwise, I would call for your and the ACTA board's immediate resignation.

Sincerely yours,

Bruce Bishins, CTC
President and
Chief Executive Officer