filing

31 July 2007

Mr Olivier Onidi
Head of Unit, F.1
Internal Market, Air Transport Agreements
& Multilateral Relations
Directorate General for Transport & Energy
European Commission
Rue de la Loi, 200
B-1049 Brussels

Dear Mr Onidi,

I write to formally request a response to the Business Travel Coalition letter to you dated 6 July 2007 on behalf of the travel industry which expressed concerns regarding the Commission’s CRS Code of Conduct consultation process. A copy of this letter is enclosed. The prospect of the Commission making a radical and substantive change to the rules is inconsistent with the Commission’s longstanding and well-understood CRS policy.

Based upon past Commission consultations it is abundantly clear that Parent Carrier status is assigned to an airline that merely owns shares in a CRS. Similarly, the text of the Parent Carrier definition is straightforward and plain.  It is found at Article 2(i) and says:

"parent carrier" means any air carrier which directly or indirectly, alone or jointly with others, owns or effectively controls a system vendor, as well as any air carrier which it owns or effectively controls;”

There has been absolutely no discussion during the nearly five-year period in which the Commission has been reviewing the Code about a possible redefinition of Parent Carrier status; nor has there been any discussion by the Commission about whether having “effective control” of a CRS was to be regarded as a precondition to treating a carrier with a “financial stake” in a CRS as a Parent Carrier.  Likewise, and quite naturally, there has been no examination of the implications for consumers and competition if CRS ownership alone were not – contrary to the historic and reasonable expectations of consumers and stakeholders in this industry given the plain language of the Code and the Commission’s pronouncements - sufficient to classify an airline as a Parent Carrier.

Unless you can confirm that a CRS ownership stake alone is sufficient for a carrier to be a Parent Carrier, then nothing less than a full public debate and impact assessment, including a competitive analysis for both the travel distribution and commercial aviation markets, is required.  This is so, in part, because a multitude of participants in the on-going Consultation process have been led by the clear text of the Code and by years of past Commission statements to reach a conclusion about the scope of Parent Carriers today that is fundamentally at odds with such a novel and unsupported view.

The Commission does not have the unilateral right to amend the words “ownership or effective control” in the Code to say, “ownership and control” in determining coverage of the parent carrier rules.

I look forward to your response.

Sincerely,

Kevin Mitchell
Chairman

Copy: Matthias Ruete, Director General for Transport and Energy, European  
          Commission

Enclosure (6 July 2007 BTC letter to Mr Onidi)