EU: Airlines Desisting Pricing Discrimination

The European Commission said this week that E.U. carriers have stopped charging different fares for the same flight according to the national residence of the passenger buying the ticket. It claims airlines have dropped the discriminatory practice as a result of the Commission launching a probe into the issue last December.

Initial evidence had suggested that a fare booked on an airline Web site varied by as much as 300 percent, depending on which country the booker entered as their place of residence. One example was a Frankfurt-Berlin flight, which cost €88 if booked in Germany but €268 if booked in Belgium.

However, corporate travel experts said that while the problem has been sorted out for the consumer market, discriminatory pricing remains firmly in evidence for those with managed pan-European travel programs.

One continuing difficulty, according to Stuart Harvey, director of corporate development for BTI UK, is local promotional or "gray market" fares specific to certain national markets. Harvey does not dispute the legitimacy of such fares being country-specific but objects to airlines not making the fares available to local markets through pan-European service centers based in third countries. "Airlines need to recognize that travelers are buying in a different way," he said. "We have had to invest a huge amount of energy into creating our own independent fare database to deal with this. Our European service centers for clients like Hewlett-Packard and Motorola are having to send bookings back to the local market to ticket them."

Harvey added that there also are occasional instances of national versions of the same global distribution system quoting different prices for the same ticket.

Discrimination also persists in negotiated corporate fares offered by the same airline, according to the head of a leading consulting firm, speaking on condition of anonymity. "Fares continue to differ country by country because they are subject to separate contracts," he said. "I have clients who complain to airlines that they sell widgets at the same price throughout Europe but they are sold different air fares in different countries."

The Commission cracked down on airline Web site price discrimination by writing to 18 leading E.U.-based airlines. All but two, Alitialia and Olympic Airways, responded that while they may have indulged in discriminatory practices in the past, they had now desisted. Tests by the Commission verified these claims.

A statement from the Commission said: "In rare cases some restrictions may still exist for certain paper-based tickets, but all electronic tickets are now available throughout the E.U. without discrimination, except, in some cases, for differences in handling fees. As a result, price levels are now similar for all E.U. residents."

The Commission added it will continue to monitor fares to ensure discrimination does not return.