American Airlines: The ethics of information display

At a cost of several hundred million dollars, American Airlines developed the Sabre reservation system used by its own ticketing agents and by travel agents in booking flights. Other major airlines developed similar systems. When a customer calls to book a flight, the agent enters information concerning the date and time of the flights required. The system displays the flights that meet these criteria, and the agent presents the choices to the customer.

Sabre is widely viewed as part of American Airlines' competitive advantage, so much so that several competitors sued American Airlines (and United Airlines) in 1984. These competitors claimed that American and United used their systems unfairly by charging excessive fees for listing other airlines' flights and by giving unfair priority to their own flights on the screen displays used by travel agents. Not surprisingly, busy travel agents were more likely to book these flights instead of looking further for flights on other airlines. American and United countered that their use of these systems was not unfair. They had invested in these systems many years earlier, and were now enjoying the fruit of these investments. Although American and United agreed to discontinue preferential display of their own flights, although some observers claim this practice has not been eliminated totally. A similar issue arose again in 1994 when Southwest Airlines refused to pay $2.50 per ticket for every ticket booked through the Apollo system owned by United Airlines, with Southwest claiming that they could not maintain their low prices and pay this amount at the same time.

Regardless of whether it was eliminated, there have been times when these systems did not provide competitive advantage. A faulty enhancement to Sabre in 1988 cost about $50 million in lost revenue by causing the system to close out discount seats prematurely during 60 days of the summer peak travel season. Customers bought discount seats from other airlines. The bug was found while analyzing the summer's disappointing results.

Questions:

1. Explain why you believe the owner of an airline reservation system does or does not have the obligation to display all airlines flights in a totally unbiased manner, regardless of whether the owner of the system invested millions of dollars building it.

2. Explain why you believe this question is similar or different to the question of whether advertisements and other marketing communications should be totally honest and unbiased.

Sources: Copeland, Duncan G. and James L. McKenney, "Airline Reservations Systems: Lessons from History." MIS Quarterly, Sept. 1988, pp. 353-370;
O'Brian, Bridget. "Giant Reservation System to Dump Southwest." Wall Street Journal, Apr. 22, 1994, p. B1;
Bozman, Jean S. "Airline Hurt by Faulty Fare Estimations." Computerworld, Sept. 19, 1988,

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