18 September 2008

EU Definition of Parenting for GDS Geeks

Funny headline but a serious subject.

I am republishing this note from the BTC group. I urge you to at least understand the issue as it does reflect on the competitiveness of the market worldwide.

To call a spade a spade - there is both theory and practice in this debate. The practical issue is that only a single GDS - AMADEUS has airline owners. The logic however could be applied to undue influence further down the line with what happens due to GDS ownership or parentage of a distribution service such as a Travel Agency or OTA.

Here is the text: Read it - the issue is quite real.

Dear Travel Industry Colleague,

The recently missed opportunity to bring legislative clarity to the European CRS Code of Conduct is proof of how the interests of 380 million European consumers can be undermined. The time is now for travel suppliers, distributors, corporate buyers and industry groups to insist that the Commission clarify beyond any reasonable doubt the critical “parent carrier” language in its promised Interpretive Notice to assure that the three CRS-owning and board-sitting airlines are bound by parent carrier obligations.

I invite you to join a Signatory Industry Letter to the Commissioners of the Directorate-General for Health and Consumer Affairs (DG SANCO) and the Directorate-General for Energy and Transport (DG TREN). The proposed letter is pasted in below for your review. If you can lend your signature to this letter, please go to http://tinyurl.com/4tndnl by COB on Friday 26 September and so indicate.

Please consider sending this email invitation to your colleagues, customers or members who participate in the European travel marketplace. We seek the support of the entire travel and tourism industry on this issue of structural significance and strategic importance to the travel industry.

Thank you,

Kevin Mitchell
Chairman, Business Travel Coalition



Thu Sep 18 15:58:24 2008

Mr Antonio Tajani
European Commissioner for Transport
B-1049 Brussels

Ms Meglena Kuneva
European Commissioner for Consumers
B-1049 Brussels

Dear Commissioners Tajani and Kuneva,

We the undersigned travel industry consumers and representatives write to express our deep concerns regarding the current revision of the computer reservation system (CRS) Code of Conduct.

You will be aware that Parliament voted on 4th September 2008 to amend the CRS Code of Conduct as part of a compromise with the French Presidency. Given the significance of this legislation for consumers, and the wider travel industry, we have serious concerns about its effectiveness.

We would like to request a meeting with you to discuss which airlines will be considered “parent carriers” and thus, obligated under the revised Code’s restrictions on abusive parent carrier behavior.

As you know, parent carriers are forbidden from restricting the flow of air and rail fare information and booking functionality to competitive distribution services. These restrictions are necessary because of the historical fact that airlines that own or control CRSs have the means and the incentive to undermine airline, rail and distribution competition to the detriment of consumers. The recently missed opportunity to bring legislative clarity to the Code is positive proof of how the interests of 380 million European consumers can be undermined.

Despite the fact that Parliament’s Transport Committee overwhelmingly approved a set of amendments on 29 May 2008 providing a clear definition of parent carrier, a flawed plenary amendment was tabled as a result of a compromise with the French Presidency. Consumer groups actively sought clarification of this amended parent carrier definition due to the insertion of a dangerously ambiguous “decisive influence” test for parent carrier status. A large number of MEPs were concerned that this insertion rendered the code ineffective, and voted to delete the problematic decisive influence text in order to safeguard consumers. Unfortunately they lost a razor-thin vote (305 to 291) to remove this language from the legislation.

Europe’s consumers now look to DG TREN and DG SANCO to cooperate closely and bring forth an interpretative notice on the definition of parent carrier as promised by the European Commission during the recent plenary. This notice should serve to protect consumers’ interests by clarifying the notion of “decisive influence” in such a way as to ensure that three CRS-owning and board-sitting airlines--Air France, Lufthansa, Iberia--are bound by parent carrier obligations.

Assuring transparency is the only way to avoid regulation that works against consumer interests. The Commission has worked hard through its online ticketing investigations to provide price transparency for the purchase of airline tickets. Full disclosure of all airfare charges and fees codified in this CRS regulation is rendered meaningless if the consumer does not have visibility to the airfare offering in the first place.

We would be grateful if you could take the time to meet with us, as soon as schedules permit, in order to discuss the issues at stake in a timely manner, and to gain a better understanding of how you intend to proceed with protecting consumer interests. A representative of our group will contact your office to see when a meeting with you might be held.



Note: This communication will be addressed to each Commissioner as an individual letter.


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