statement

Travel Groups sharply Criticize EC CRS Review Process 

Change for 3 Airlines and Their CRS Ignores On-going Consultation Process

Groups Call for Immediate Reopening of Stakeholder Consultation to Protect Consumers

Brussels, Belgium, 17 July 2007-The Belgium Association of Travel Management (BATM), the Business Travel Coalition (BTC), the International Airline Passengers Association (IAPA), the Netherlands Association for Travel Management, Advantage Travel Centers, Advantage Focus Partnership and the Travel Management Alliance today expressed astonishment and deep concern that some officials at the European Commission's Directorate-General for Transport and Energy, DG TREN, appear ready, without public notice or debate, to find that there are no parent carriers of computer reservation systems (CRSs) in Europe. Such a decision would render the EU Code of Conduct that protects consumers null and void, exposing business and leisure consumers to biased information and higher prices. 

IAPA Director, Consumer & Industry Affairs, Nancy McKinley stated, “What is especially mystifying is that this secret decision, that would undermine completely the effectiveness of the Code, is being considered while a Commission public consultation is being held that has overwhelmingly confirmed that these basic protections are needed and should apply to all carriers with ownership shares in CRSs. Consumer interests, which DG-TREN officials had solemnly promised would be paramount in these proceedings, are now moments from being sacrificed under cover of darkness.” 

In April, DG-TREN commenced a stakeholder consultation that invited comments on the current airline distribution marketplace and posed a series of questions to industry participants. Not a single word was mentioned about challenging the current definition of "parent carriers" (i.e., those who "own or effectively control" a CRS) in Europe. Nevertheless, based upon a recent press report speculating that DG TREN might be considering a change to the definition of "parent carrier" and other evidence, BTC wrote to DG-TREN to express deep concern and to seek clarification. Since writing that letter, BTC has now received additional information that high level officials at DG-TREN stand ready to change the definition of parent carriers to quietly make all existing parent carriers of CRSs in Europe disappear. (Please find the BTC letter to DG TREN at http://businesstravelcoalition.com/advocacy/statements/116.html.)

BTC Chairman Kevin Mitchell stated, "This secret attempt by some regulators to favor a few large airlines at the expense of consumers throughout Europe will be universally condemned and challenged by consumer groups and travel industry stakeholders. We also expect support from Members of Parliament who have stood up for consumers in the past. We stand ready to publicly debate the need for these protections in a fair and transparent manner."

The Coalition would not be responding so strongly were this not a repeat of past efforts to subvert the review process under the cover of dark. For example, in 2005 the tactic was to bury the Code within scores of obsolete rules and regulations in a package destined for the regulatory dustbin. Only intervention by Parliament averted this consumer disaster. Now, under the guise of an open and collaborative external and internal review process, the “Mother of All Workarounds” has been conceived.     

"There comes a point when what is at stake is so vital to consumers, that there is no choice but to lay bare the facts and context so that all stakeholders can seek to protect their interests before it's too late," said BATM President Nora Buysschaert. "We will work in coming weeks to bring this travesty to the attention of other Commission officials, Members of Parliament and other interested parties who will no doubt rally to the consumer cause," she added. A formal filing with the Commission to keep core consumer protections in place garnered 119 signatures from a cross-section of businesses, travel agents, consumer groups including the United Nations with travel activities in all EU states.

Several travel groups met on 5 June 2007 for 90 minutes with officials at DG TREN to discuss the core consumer protections that should be retained in any revision to the CRS Code of Conduct. The officials indicated agreement with all of the group's concerns and recommendations while throughout the meeting, as in other venues, remaining silent on this monumentally significant potential change in interpretation of what constitutes a Parent Carrier. "The ultimate irony of this is that DG-TREN is conducting its review under the guise of better regulation," added Mitchell. "Better regulation, if anything, means fairness and openness, not secrecy.”

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We understand another prominent travel organization had the following to say on this development:

“We are surprised to learn of a proposal to alter the ownership definition when this was not mentioned during our in-depth discussions with representatives of the European Commission in June of this year.  We would have very much welcomed consultation on this key issue as it is our belief that the definition does need reviewing in light of the different models of ownership now that private equity is so prolific in our industry.  If the move to re-define the ownership clause is, however, designed to loosen the enforcement of regulations on the direct owners of global distribution systems then we would consider this an attempt by the European Commission to remove regulation by the back door.” Paul Tilstone, Executive Director, Institute of Travel Management UK & Ireland

CONTACT BTC || Kevin Mitchell | 610.341.1850 | mitchell@BusinessTravelCoalition.com
CONTACT IAPA || Jonathan French | +44 208 253 5052 | jonathan.french@iapa.co.uk

ABOUT BATM
BATM's mission is to become acknowledged as the organization representing Travel Managers and buyers within the Belgian travel industry, promoting industry best practice, education and providing forums for networking and knowledge-sharing.

ABOUT BTC
Founded in 1994, the mission of the Business Travel Coalition is to bring transparency to industry and government policies and practices so that customers can influence issues of strategic importance to them. 

ABOUT IAPA
The International Airline Passengers Association has more than 45 years’ history representing frequent business travellers.  It has offices in Dallas, London and Hong Kong and over 400,000 members throughout the world.