Airlines face criticism for ‘limiting access to fares’

Airlines face criticism for ‘limiting access to fares’

Industry groups demand EU action against airlines’ push to ‘biased websites’. Ian Taylor reports

European associations representing air passengers, travel technology groups, travel agents and OTAs are demanding the European Commission enforce airline distribution rules.

They claim increasing airline consolidation threatens consumer choice as carriers seek to drive bookings through “biased websites” and away from independent distribution channels which display all flight options.

Their demands come alongside publication of a report this week suggesting airline mergers, joint ventures and code-share deals have cut competition, and as IAG owned British Airways and Iberia are poised to impose an £8 (€9.50) fee on GDS bookings.

BA and Iberia will introduce their Distribution Technology Charge on November 1. Lufthansa Group imposed a €16 Distribution Cost Charge on all GDS bookings of Lufthansa, Swiss, Brussels and Austrian Airlines flights in 2015.

The report, ‘The Impact of Airline Consolidation on Consumer Choice’, suggests airline groups are increasingly driving consumers to their own websites by restricting information available to agents and “financially penalising consumers who buy from independent and neutral distributors” in order “to avoid competition and comparison shopping”.

The study, by air transport consultancy GRA, was commissioned by the European Travel & Technology Services Association (Ettsa); Ectaa, the European federation of travel agents’ and tour operators’ associations; and the European Passengers’ Federation (EPF).

Ettsa represents GDS companies Travelport, Amadeus and Sabre, and leading online travel agents including Booking.com and Expedia. Ectaa comprises leading travel industry associations across Europe including Abta.

The report calls on the EC to “consider strictly enforcing provisions of the Computerised Reservation Systems Code of Conduct to prevent unfair competition from airline’s own distribution systems against the neutral GDSs”.

The CRS Code of Conduct forms part of an EC regulation last revised in 2009 which stipulates “air services by all airlines are displayed in a nondiscriminatory way on travel agencies’ computer screens”.

The report also argues for “a review of airline mergers and cooperation between airlines including joint‑venture partnerships and their consequences for consumers”.

It urges “a new framework for preserving competitive options for consumers (including the ability to comparison shop)”, and a review “of the adverse effects on consumers of Google using its dominance in general internet search to favour its own travel content and that of vendors who pay for prominence”.

The study concludes: “The GDS(s) directly or indirectly support the full range of indirect distribution channels including OTAs, bricks and mortar agents, travel management companies and metasearch. Competition may be hampered if major carriers operating their own distribution systems penalise travel agents and consumers for using GDSs by imposing fees or denying full content.”

Ettsa secretary general Christoph Klenner said: “Airline consolidation [allows] airline groups to hold consumers captive to their biased websites.”

Ectaa secretary general Michel de Blust warned: “Consumers will pay the price.”

EPF chairman Josef Schneider added: “An attack on transparency is an attack on 25 years of a successful EU air transport policy. The study shows clearly the need to reassess the effects of consolidation.”

More: Special Report: ‘Consolidation reduces choice and raises fares’

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