The European Commission is attempting to hobble its own revision of its code of conduct governing global distribution systems, travel industry representatives have alleged. The groups claim the Commission's Directorate-General for Transport and Energy is preparing next month to change its definition of what constitutes a parent carrier of a GDS so that Amadeus effectively would no longer be considered to have any parent carriers.
This change of status for Amadeus is crucial because the Commission is preparing to announce in the next couple of months that it will deregulate most of its 18-year-old Computer Reservation System Code of Conduct but retain curbs on GDSs with parent carriers to prevent what is known as double dominance. Double dominance exists in a country where the dominant carrier has ownership of the market-leading GDS.
This is the case in France, Germany and Spain because Air France/KLM, Lufthansa and Iberia own stakes of 23.6 percent, 11.5 percent and 11.7 percent, respectively, in Amadeus. The fear is that a dominant carrier could withhold some or all of its fares from a GDS in which it does not have a stake, or lean on travel agencies to choose the GDS in which it has ownership if special corporate fares are to be made available to their clients.
Radnor, Pa.-based buyer advocacy group Business Travel Coalition, along with the International Airline Passengers Association and the Belgium Association of Travel Management, said it is angry with the Directorate-General. Chairman Kevin Mitchell claimed he emerged from a meeting with the Directorate-General last month understanding that the groups' aims of deregulation other than for GDSs with parent carriers had been met
(BTN, June 11). Mitchell alleged that no mention of a review of the definition of parent carriers was made at the 90-minute meeting or in a strategic consultation the Directorate-General launched with the travel industry in April. BTC described the redefinition as "the mother of all workarounds."
IAPA director for consumer and industry affairs Nancy McKinley commented: "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 officials of the Commission's Directorate-General for Transport and Energy had solemnly promised would be paramount in these proceedings, are now moments from being sacrificed under cover of darkness."
BTC chairman Kevin Mitchell said: "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."
A spokeswoman for the GDS said she was unaware of a pending redefinition of parent carriers by the Commission. However, she added that Amadeus has considered itself not to have parent carriers for two years. "We have always said since our leveraged buyout in 2005 that airlines have a minority stake in Amadeus," the spokeswoman said. "They do not operate as a single voting bloc. Amadeus is owned by all sorts of carriers with different interests."