Brussels, 15/11/2007 (Agence Europe) - On Thursday 15 November, the European Commission adopted a proposal to simplify and modernise the two-decade-old rules for computerised reservation systems (CRS), used by travel agents to book airline tickets on behalf of their customers. The revision of the 1999 Code of Conduct for computerised reservation systems will bring more competition in the field of airline ticket distribution by reducing booking fees and pushing airlines to offer more travel options via the CRSs. The proposal will not change rules for parent carriers (three European airlines own the Amadeus CRS). The new rules are already being criticised by Amadeus' competitors, which see it as a way of favouring European CRSs.
The regulation aims to liberalise the 1989 code of conduct that introduced strictly equal treatment among CRSs to avoid an unfair playing field emerging between airlines with their own systems and airlines without. Airlines that own CRSs currently have to submit the same information to other systems as is held on their own system (a participation obligation). CRSs are also required to provide equal access to information to all airlines (principle of equality and non-discrimination) and apply the same tariffs to all airlines for the same services (see EUROPE 8983). The fully regulated market has lost its raison d'etre and competitiveness and airlines prefer to inform potential customers of offers directly via the internet (which is also much cheaper), often depriving travel agents of access to a complete offering. To adapt CRSs to match current trading conditions (the presence of alterative sales outlets like the internet) and to make them more competitive, the European Commission has decided to increase freedom to negotiate the booking fees charged by CRSs and information on fair content supplied by airlines. The restrictions on accessing and distributing information will be scrapped. The revised code of conduct will retain a raft of safety measures, however, imposed on CRS-owning airlines to prevent an uneven playing field developing. To ensure travel agents can access non-discriminatory information, the code of conduct will continue to ban sellers of CRS systems from including exclusive clauses in their sales contracts. A new introduction is that the code of conduct has beefed up measures banning sellers from identifying travel agents in airlines' marketing databases (Marketing Information Data Tapes, MIDT). The Commission argues that this should prevent airlines from using information to pressurise travel agents to cut the number of reservations they make with rival airlines. CRS suppliers will also have to clearly separate off CRSs from airlines' own reservation systems. The code also keeps the principle of compulsory participation by CRS-owning airlines and bans them from using incentives and disincentives for the use of other companies' CRSs. Following the review of the 1999 code of conduct, the CRSs have also been made accessible to rail companies connected with air transport. The liberalisation of the negotiation process also applies to such rail companies.
The CRSs collect information about prices and seat availability from airlines, along with hotel and car rental details, which they submit to travel agencies and reservation websites. Of the three main systems in the world, two are from the US (Sabre and Travelport - Travelport is a merger of two other CRSs, namely Galileo and Worldspan) and one which belongs to some of the EU's biggest airlines (Air France-KLM, Iberia and Lufthansa). This is why the Commission's ideas were promptly slammed by the C-FARE coalition (Coalition for Fair Access to Reservations in Europe), which was set up in 2005 by Galileo and Sabre (later joined by British Airways and Business Travel Club). In a press release issued on Thursday, C-FARE's executive director, Brandon Mitchener, said: 'Parliament and transport ministers should send a clear message to the Commission that they oppose this sort of deregulation by stealth… either by establishing a parent carrier ownership threshold at 5% or by acknowledging that the parent carrier obligations apply today to Lufthansa, AirFrance-KLM and Iberia and that any future change in their status must be subject at a minimum to a public consultation and an impact assessment.' (A.BY.)