The European Commission this month enacted new European Union air transport regulations to provide more airfare comparison transparency, standardize air pricing for EU citizens and eliminate some discriminatory pricing practices.
The legislation abolishes price discrimination based solely on the traveler's place of residence within the EU and mandates that published airfares include all taxes and charges at the point of sale. The rule also requires carriers to itemize all fees, surcharges and taxes, and prevents them from assessing "optional additional charges on passengers without their express consent."
"It is vital that all the players keep to the same rules," said Antonio Tajani, vice president of the European Commission with responsibility for transport. "That is one condition of liberalization in Europe that has been a real success story, with more travel possibilities and lower prices. Fair competition is the key to success. With price transparency, passengers will know in advance how much they are going to pay and will be able to make informed choices."
The legislation "bans price discrimination on the basis of the place of residence or the nationality of the customer or the place of establishment of the travel agent. In practical terms, this means that for the same product-i.e. the same seat on the same flight booked at the same moment-there should be no price differences based on the place of residence or the nationality of the passenger. In the past, such differences have often been observed on airlines' Web sites where residents of one Member State had to book on the country-specific Web site of the airline and where prices could be different."
The U.K.-based Guild of Travel Management Companies is a proponent of the legislation but, according to chief executive Philip Carlisle, some of it is open to interpretation by each EU state. "It should mean that any fare published for a journey starting from within the EU should be purchasable by any citizen within any EU state," Carlisle said. "This should be good news for any travel buyer looking out for the best available deals, as it does not, nor should it, prevent airlines from holding 'sales' within one or more countries. It just allows anyone to buy."
Eindhoven, Netherlands-based Philips Electronics director of strategic sourcing for airlines and corporate card Peter Sijbers said price transparency will help in negotiations, as air program management has become increasingly complex with the multitude of additional charges now added to base airfares. Sijbers recently conducted an internal analysis and identified 95 different tax buckets for flights originating in Europe. He also found that taxes now account for double-digit percentage points of the total cost of the ticket, up from 1 percent to 2 percent due to the introduction of new government, airport and green taxes.
"The sooner the better," said Sijbers. "I'm very much in favor of bundling to a certain extent because it also creates an issue in my negotiations because effectively what you influence as a travel manager and what you are able to negotiate is diminishing. You negotiate on the base fare. Ideally, you would like to negotiate on the total cost."
While the most recent ruling targets some furtive pricing displays by some online travel agencies and low-cost carriers in Europe mainly used by leisure travelers, Carlson Wagonlit Travel vice president of EMEA supplier management Frédéric Camus said this also provides more accurate and transparent price comparison for business travelers using public fares for routes which the company does not have negotiated fares. "We have had some complaints in the recent past from clients who found it strange that we weren't able to match prices that they were able to find on the Web because they had searched other sites that we had no access to," Camus said.
The European Commission's legislative action followed legislation from the European Parliament in September that revised the computer reservation system code of conduct in order to reduce discriminatory practices by global distribution systems in airfare displays and provide more visibility into airfare anatomies
(BTNonline, Sept. 4).