Travel Industry Applauds Draft Kirkhope Report on CRS Reform

Date

04 Apr 2008

Sections

Trade & Society

Press release

Brussels, Belgium, April 3, 2008 - A broad cross-section of European business travel industry stakeholders today transmitted a Signatory Letter to Members of the European Parliament urging them to vigorously support a draft report by the Committee on Transport and Tourism regarding revisions to a Code of Conduct, which governs global distribution systems (GDSs). The report, written by Rapporteur Timothy Kirkhope, appropriately clarifies the definition of “parent carrier” and to whom the Code applies, and is a major step forward in protecting European consumers from higher airfares. (Download the Kirkhope report at http://tinyurl.com/2od5f4)

“We are delighted to see that the Kirkhope report clearly recognizes the wider issue of potentially inappropriate influence of distribution systems by direct or indirect travel vendor capital and/or board representation. We wholeheartedly support the recommended amendments to the regulations,” stated Paul Tilstone, Executive Director, Institute of Travel Management, and a signatory to the letter.

For nearly 20 years the existing Regulation has governed the behaviour of the GDSs and of the airline owners of such systems, the parent carriers. History has demonstrated the painful lesson that whenever airlines hold financial interests in CRSs they inevitably will engage in competitive abuses in both the airline and airline distribution sectors - unless this misconduct is effectively restrained by clear rules. Since nearly all corporate travel to this day is booked by travel agencies equipped with GDSs, the issue of getting the Code right is of especial significance to business travellers.

International Airline Passengers Association Industry Affairs Spokesman Jonathan French stated, “Like many in the industry, I was astonished that the new understanding of a GDS “parent carrier” could be loose enough to allow joint ownership by 3 airlines of 46% of a GDS to pass without comment, which would effectively mean that the Code of Conduct becomes redundant. It’s pleasing that the European Parliament has brought some clarity and a clear definition to the table with this amendment, which is clearly in the interests of both travel agents and travellers.”

The Signatory Letter states: “Parliament has the opportunity to correct the parent carrier loophole created by the Commission to avoid detrimental effects for travellers across the EU. Without amendment travellers will face a less competitive environment for air fares, and many small/medium-sized travel agencies will find it increasingly difficult to remain competitive while operating rival systems to Amadeus. Accordingly, we call on the Parliament to close this dangerous loophole by amending the definition of parent carrier so as to leave no doubt that, given their ownership interests in Amadeus and their representation on its Board, Air France, Iberia, and Lufthansa remain parent carriers and must respect the historic safeguards against competitive abuses that have long applied to parent carriers.” (The Signatory Letter can be downloaded at http://tinyurl.com/37rffs)

Business travelers call on all Members of Parliament, including those from Germany, France and Spain, to ratify the Kirkhope report and thereby put the interests of European consumers first.

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CONTACT BTC || Kevin Mitchell | 610-341-1850 | mitchell@BusinessTravelCoalition.com

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