The decision last week to mandate that any delay of 3 hours or more is the same as a flight cancellation was a victory for consumer protection and an abject lesson for those willing to understand it.
Formally on November 19th, European Court of Justice in Luxembourg decided that passengers who are forced to wait three hours or more will be compensated 600 euros, the same as if their flight had been cancelled.
There is a lot of documentation on this but there are three critical factors that we should pay attention to:
1. The scope of compensation was broadened to cover delays as well as cancellation. Just as an aside here - this may have a negative effect in that if an airline deems that a flight delay is beyond the threshold then the decision to cancel will be taken early and passengers could be left compensated but stranded - just a thought).
2. The delay time has dropped from 5 hours to three hours
3. The definition of what could be compensated - IE the reasons behind the delay was made less precise with the impact that other traditional "reasons" now become "excuses".
All this makes the US scheme even the proposed Bill of Passenger Rights look decidedly weak.
In my humble opinion the US should enact a clear set of rules along with penalties to force compliance by the airlines in the delivery of their product. At the moment the whole contract process is decidedly one-sided. The airlines can decide what they want to do to modify their part of the contract yet the consumer has little or no ability to do so. That to me is unfair.
And no - for once I am not picking on the airlines - I just fundamentally believe that the contract between two parties should be fair and equal. Currently this is not the case based on arcane rules that stem from the propeller era when the product was a lot less reliable. This is no longer the case and the travelling public in the USA deserve a clear set of rules.
And what do you think?
Cheers
Showing posts with label ECAC. Show all posts
Showing posts with label ECAC. Show all posts
21 November 2009
24 August 2008
Amadeus Lobbying vs Consumer Protection - MEPs to decide this week
This week (or shortly depending on their demanding summer holiday schedule) the nice people who are supposed to represent the interests of the European Consumers - namely the Members of the European Parliament - will vote on the new CRS rules and code of conduct. Most of the rules are common sense. However one rule remains open to abuse. As a direct result of Amadeus Lobbying (and no doubt some nice amounts of contributory political expedient cash) The Commissioner (now an Italian) will rule on one contentious issue that of the definition of "Parent" carrier.
The issue is simple. Does Amadeus board of directors which includes voting representatives from the 3 former majority owners - Iberia, AirFrance/KLM, and Lufthansa constitute a totally open and transparent separation of interests with the Amadeus GDS. (The Commission and European Parliament persist in using the term CRS even though the rest of us correctly use GDS?
Each of these airlines is dominant not only in its own markets but exert significant influence over a very broad swath of the Travel Industry. Amadeus too is now without any shadow of doubt the dominant market force in distribution of airline and travel products throughout the European Community and the other members of the ECAC states.
If the MEPs follow the path they are on - they will free the Madrid based company from any and all restrictions. This is blatantly anti competitive and must be stopped.
The EU parliament's TRAN committee (the group who reviewed the proposal) agreed by an overwhelming majority to place restrictions by creating a new definition of airline parent type control. This was essentially if one or more airlines with board representation owned a chunk of GDS stock then they would be subject to the parent restriction which would ensure open competition between Aamdeus and those GDSs who did not have Airline ownership. Despite this vote the Commission pressed the so called "Independent Rapporteur" appointed to look into this situation to withdraw his original recommendation and table it for the future review - past when the MEPs would vote.
Comically this makes for typically hilarious political quango reading. Sadly this makes for a potential disastrous monopolistic situation in all ECAC markets.
Some might say that the issue is moot from two perspectives.
A) the market is in open turmoil anyway as witnessed by the Lufthansa vs Amadeus spat in Germany over the new fee structure to be imposed on Amadeus generated travel agency bookings
B) the real market has moved direct with the LCCs and the FNC airlines fighting it out directly.
In my view Amdeus is already too dominant. The level of dominance of Amadeus demands a totally fresh look at its businesses. Rather than giving it new freedoms - it should be split up into its component parts:
Airline Hosting and IT services
Distribution services
Non-Air Services including branded products such as Opodo.
The current interlocking relationships of Amadeus and its airline owners has been held in check for many years under the current ECAC code of conduct. To sweep that away now as the market consolidates both on the airline side and on the GDS side would be tantamount to a license to print even more money by Amadeus and its airline owners at the expense of the consumer. It is anti-competitive, It is anti-consumer and its not within the spirit of the EC laws.
Not sure that the MEPs will pay any attention. They know but frankly they don't seem to care.
Check out what BTC has to say about this.
Cheers
The issue is simple. Does Amadeus board of directors which includes voting representatives from the 3 former majority owners - Iberia, AirFrance/KLM, and Lufthansa constitute a totally open and transparent separation of interests with the Amadeus GDS. (The Commission and European Parliament persist in using the term CRS even though the rest of us correctly use GDS?
Each of these airlines is dominant not only in its own markets but exert significant influence over a very broad swath of the Travel Industry. Amadeus too is now without any shadow of doubt the dominant market force in distribution of airline and travel products throughout the European Community and the other members of the ECAC states.
If the MEPs follow the path they are on - they will free the Madrid based company from any and all restrictions. This is blatantly anti competitive and must be stopped.
The EU parliament's TRAN committee (the group who reviewed the proposal) agreed by an overwhelming majority to place restrictions by creating a new definition of airline parent type control. This was essentially if one or more airlines with board representation owned a chunk of GDS stock then they would be subject to the parent restriction which would ensure open competition between Aamdeus and those GDSs who did not have Airline ownership. Despite this vote the Commission pressed the so called "Independent Rapporteur" appointed to look into this situation to withdraw his original recommendation and table it for the future review - past when the MEPs would vote.
Comically this makes for typically hilarious political quango reading. Sadly this makes for a potential disastrous monopolistic situation in all ECAC markets.
Some might say that the issue is moot from two perspectives.
A) the market is in open turmoil anyway as witnessed by the Lufthansa vs Amadeus spat in Germany over the new fee structure to be imposed on Amadeus generated travel agency bookings
B) the real market has moved direct with the LCCs and the FNC airlines fighting it out directly.
In my view Amdeus is already too dominant. The level of dominance of Amadeus demands a totally fresh look at its businesses. Rather than giving it new freedoms - it should be split up into its component parts:
Airline Hosting and IT services
Distribution services
Non-Air Services including branded products such as Opodo.
The current interlocking relationships of Amadeus and its airline owners has been held in check for many years under the current ECAC code of conduct. To sweep that away now as the market consolidates both on the airline side and on the GDS side would be tantamount to a license to print even more money by Amadeus and its airline owners at the expense of the consumer. It is anti-competitive, It is anti-consumer and its not within the spirit of the EC laws.
Not sure that the MEPs will pay any attention. They know but frankly they don't seem to care.
Check out what BTC has to say about this.
Cheers
20 February 2008
IF you are so inclined... Send your comments to the EC Parliament on the new Code
The EC Code of Conduct has been prepared by Jacques Barrot and his team. Despite a lot of opposition to the plan and new code from the broad spectrum of the industry, the new code seems to favor European based GDS companies.
Since there is only one of these animals - it would seem to focus on the benefit to them.
Regular readers know that I am against half hearted regulation. Either manage or don't. As Ted Turner used to have on his desk a sign that said "Either lead, follow or get out of my way", this is a good place to pay attention to that advice.
If you would like to add your voice to this poorly defined legislation - then I suggest going here:
While I have a lot of respect for M Barrot - I believe that here he has been misled. At least they could have joined the rest of the world and called the class GDS... rather than CRS which still persists in the legislative text.
Since there is only one of these animals - it would seem to focus on the benefit to them.
Regular readers know that I am against half hearted regulation. Either manage or don't. As Ted Turner used to have on his desk a sign that said "Either lead, follow or get out of my way", this is a good place to pay attention to that advice.
If you would like to add your voice to this poorly defined legislation - then I suggest going here:
While I have a lot of respect for M Barrot - I believe that here he has been misled. At least they could have joined the rest of the world and called the class GDS... rather than CRS which still persists in the legislative text.
12 November 2007
New ECAC GDS/CRS Rules due this week. Industry Response
The new ECAC rules are due to be announced this week. There is much anticipation of the content. In advance of this - various travel groups have come together to create a manifesto of sorts. Here is the entire press release from one of the parties - the BTC:
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--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 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.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium 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/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
--
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Business Travel Coalition214 Grouse LaneRadnor, PA 19087
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--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 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.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium 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/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
--
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Business Travel Coalition214 Grouse LaneRadnor, PA 19087
New ECAC GDS/CRS Rules due this week. Industry Response
The new ECAC rules are due to be announced this week. There is much anticipation of the content. In advance of this - various travel groups have come together to create a manifesto of sorts. Here is the entire press release from one of the parties - the BTC:
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--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 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.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium 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/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
--
The following information is a reminder of your current mailing list subscription:
You are subscribed to the following list:
Travel Industry News
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You may automatically unsubscribe from this list at any time by visiting the following URL:
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If the above URL is inoperable, make sure that you have copied the entire address. Some mail readers will wrap a long URL and thus break this automatic unsubscribe mechanism.
You may also change your subscription by visiting this list's main screen:
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The following physical address is associated with this mailing list:
Business Travel Coalition214 Grouse LaneRadnor, PA 19087
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--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 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.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium 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/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
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