Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
13/11/2007 01:17
PR Newswire
BRUSSELS, Belgium, November 13 /PRNewswire/ --
- Consumer choice in air and rail travel at risk
Europe's business travel industry today transmitted the results of a
Customer Referendum to European Commission Vice-President Jacques Barrot
concerning revisions to the "Code of Conduct," rules that govern the
computerized reservations system (CRS) industry in Europe. The Referendum is
signed by International Airline Passengers' Association, Advantage Focus
Partnership, Belgium Association of Travel Management, Business Travel
Coalition, Finnish Business Travel Association, Institute of Travel
Management, Scottish Passenger Agents' Association and Travel Management
Alliance. These organizations represent thousands of corporations and
millions of customers of the air and rail transportation system in Europe.
The Code has protected consumers against well-documented,
anti-competitive behavior in the airline and travel distribution marketplaces
when airlines own even a small percentage of a CRS. The Code currently
applies to airlines that are considered "Parent Carriers" by virtue of either
an ownership stake in or effective control of a CRS. History has proven that
even a small percentage of airline ownership in a CRS provides an
irresistible economic incentive for abuse. These abuses include privileging
the "family-owned" CRS with exclusive and timely-loaded airfare content,
practices that eliminate healthy CRS competition and solidify dangerous
airline-owner dominance. Airline ownership of CRSs provides further
incentives to undermine comparison shopping between air and rail travel
options. Without applicable rules, consumers throughout Europe would be
denied access to all choices and end up paying higher prices for travel.
As evidenced by numerous Commission communications, and its indifference
to the repeated urging of a vast assemblage of concerned industry
stakeholders for timely clarification, the Commission appears intent on
redefining what constitutes a Parent Carrier and rendering the ownership test
obsolete. This market-distorting development would turn the regulatory clock
back 20 years before the Code was in effect and unsuspecting consumers paid
supra premium prices for air travel, when for example, airfare offerings were
manipulated by CRS owning airlines to hide competitors' lower prices. Scores
of millions of European consumers and hundreds of thousands of small and
medium size enterprises who use smaller travel agencies are particularly
vulnerable. (See analysis at http://tinyurl.com/2jaewc )
The Customer Referendum, first introduced during a Customer Hearing in
Brussels on 20 September 2007, resulted in a call for (1) a threshold of a 5%
ownership stake by an airline in a CRS for the purpose of establishing the
status of Parent Carrier; (2) confirmation by the Commission that Air France,
Iberia and Lufthansa are presently Parent Carriers of Amadeus; and (3)
affirmation that the status of Air France, Iberia and Lufthansa as Parent
Carriers of Amadeus shall be subjected to written and oral industry
consultation prior to any proposed change. The Referendum follows.
EU CRS Customer Referendum
WHEREAS,airline ownership of Computer Reservation Systems is the raison
d'etre for adopting and maintaining a CRS Code of Conduct; and
WHEREAS,the undersigned travel industry associations have firmly
committed themselves to achieving reasonable reform of the existing EC CRS
Code of Conduct, while maintaining in force those core protections that
effectively protect consumers from abusive conduct that has historically and
inevitably resulted from even small levels of airline ownership of CRSs; and
WHEREAS,serious and ongoing concerns remain that the European Commission
is improperly and unilaterally undermining airline "ownership" as an
independent means of conferring "parent carrier" status under the Code; and
WHEREAS,the European Commission's reinterpretation of "parent carrier"
criteria would dramatically break with long-settled precedent, contravene
industry expectations and ignore the plain language of the Code without
properly submitting the change to industry participants for consultation; and
WHEREAS,CRS airline ownership continues to present a real world problem
the Code must address in that Amadeus, Europe's largest CRS, continues to be
over 46% owned by Air France, Iberia and Lufthansa -- major European airlines
that have both the means and the incentive to abuse this ownership position
in both the aviation and the distribution markets in the absence of core
protections;
THEREFORE, BE IT RESOLVED THAT:
1. The revised Code of Conduct shall contain a recital that shall
unambiguously state, "Whereas, air carriers which own or effectively control
a CRS system, alone or jointly, can derive unfair advantages in the
marketplace from such a position." The revised Code of Conduct shall include
a definition of "parent carrier" that will include an airline ownership
threshold of five percent (5%) of the equity, held directly or indirectly, in
a CRS company; and
2. The European Commission shall confirm in writing that Air France,
Iberia and Lufthansa are presently "parent carriers" of Amadeus under the CRS
Code of Conduct; and
3. The status of Air France, Iberia and Lufthansa as parent carriers of
Amadeus shall be subjected to written and oral industry consultation prior to
any proposed change; in addition, such consultation shall consider all
inappropriate influencing factors throughout the distribution chain; and
4. The European Commission in any revised Code of Conduct shall retain
the following core protections: mandatory participation and the bans against
commission tying, display bias, and functionality discrimination; and
5. All rules other than the core protections shall be eliminated from the
revised CRS Code of Conduct; however, the prerequisite for this elimination
are the Commission's enactment of Resolutions 1, 2, 3 and 4 above.
We the undersigned commit ourselves to this Referendum and urge the
European Commission to enact them and thereby seize this historic opportunity
to achieve Better Regulation in travel distribution.
International Airline Passengers' Association-
http://www.iapa.com/index.cfm/travel/home.welcome
Advantage Focus Partnership -
http://www.sunwaystravel.co.uk/focus-partnership.asp
Belgium Association of Travel Management - http://www.batm.be/
Business Travel Coalition - http://businesstravelcoalition.com/
Finnish Business Travel Association - http://www.fbta.net/
Institute of Travel Management - http://www.itm.org.uk/
Scottish Passenger Agents' Association - http://www.spaa.org/
Travel Management Alliance - http://www.tmallc.com/new/
Web site: http://www.btcweb.biz
http://tinyurl.com/2jaewc
http://www.iapa.com/index.cfm/travel/home.welcome
http://www.sunwaystravel.co.uk/focus-partnership.asp
http://www.batm.be
http://businesstravelcoalition.com
http://www.fbta.net
http://www.itm.org.uk
http://www.spaa.org
http://www.tmallc.com/new
Kevin Mitchell of Business Travel Coalition, +1-610-341-1850, editor@btcnewswire.com