September 2022, Virtual
September 29 2022, Virtual
Now in its 27th year, the Business Travel Awards
It might be understandable to dismiss the conference organised in Brussels this week by C-FARE as going over old ground.The arguments as to why there should not be full de-regulation of the GDS/CRS Code in Europe have been well rehearsed.But it would also be wrong. Familiar arguments were re-run â€“ but when there is a chance that complete de-regulation could distort distribution in Europe, these arguments need to be aired repeatedly.And as long as three of Europe's largest carriers, Air France, Lufthansa and Iberia have between them a stake of just under 50% in Europe's dominating GDS, Amadeus, that chance exists.(It should be stressed here that Amadeus has made it clear that it will abide by any CRS Code.) However there was also new ammunition provided by Carl Marcussen, senior researcher at the Centre for Regional and Tourism Research in Bornholm, Denmark and backed up by Gordon Wilson, president and ceo of international markets for Cendant TDS which owns Galileo, also a leading European GDS.This undermines one argument of the pro-de-regulators that everyone is moving towards online bookings. Dr Marcussen said that while there had been a 34% increase in online bookings in Europe in 2005, they still only accounted for 10.3% of the total number of bookings. But of the online bookings, worth â‚¬25.2bn in 2005, 35% were made in the UK, 20% in Germany and 14% in France. That is 69% of them in just three countries.The amount in other countries, Dr Marcussen said, was small: 2% in countries of Eastern Europe, 6% in Southern Europe (Greece, Italy, Spain and Portugal) and 9% in the Benelux countries, Switzerland, Austria and Ireland.Again while online bookings in Europe are predicted to rise to 12.3% this year (worth â‚¬31.5bn), there is no sign that the continent is catching up with the US.Mr Wilson, quoting figures from British Airways, said that in December 2005, 65% of bookings in Europe were still made through the trade. In the UK, the biggest user of online facilities, this figure was still a high 58% while for the rest of Europe it was 80%.More pertinently, figures from Amadeus, Mr Wilson said, predicted that even by 2014, 50% of European air bookings would be made through a GDS.The rush to book online â€“ at least in parts of Europe â€“ may not be a swift as we assumed. As long as large numbers use the GDS, those against full de-regulation will argue for protection against possible abuse.While Amadeus in Europe has stayed above this battle, there is some evidence that the owner airlines do no have the same attitude.Brandon Mitchener, executive director of C-FARE, quoted a letter written by Lufthansa to an agent in Italy which said that group bookings could only be made through the Amadeus GDS.Cendant also revealed that it was preparing a complaint to the EC about Iberia and its dealings with a large Spanish agency.Mr Mitchener said that C-FARE had already filed a number of complaints on alleged abuse to the EC.The sensible view that emerged from the conference was that reasonable reform was welcome but not the abolition of safeguards.Michel Blust, secretary of both the Guild of European Business Travel agencies (GEBTA) and ECTAA which represents European leisure agencies, told the conference: "CRSs Code of Conduct â€¦ needs to be reviewed and notably simplified."The air transport distribution has significantly evolved in the last 15 years, therefore the CRS Code of Conduct needs important updating. However, the market and competition conditions have not changed to the extent that deregulation would be advisable: some core provisions of the CRS Code of Conduct must be maintained."An important feature of the current CRS Code of Conduct is that carriers controlling a CRS have an obligation to participate in competing CRSs. This is necessary to prevent a CRS with parent carriers from taking discriminatory measures against competing airlines and CRSs."Ex-ante legislation is still required because the level of competition in the markets for CRSs and for air transport is low in Europe and because the leading CRS in Europe is owned by three major European airlines."The questions remaining is when and how the EC will act. The first still seems a mystery â€“ despite what seems to be an overwhelming view that reasonable reform is acceptable.The second? Again no clear answer but perhaps not until next year at the earliest.