In a long awaited decision, the European Commission has opted for partial de-regulation of the CRS code of conduct.
The EC said the new code of conduct, which now goes before by the European Parliament, would "allow CRSs and …travel agents to expand their offer and better compete in the airline distribution market."
But critics said the EC had created a "giant loophole" in the new code by failing to clarify its definition of "parent carriers."
The new Code was also criticised for failing to address "the increasing trend of airlines to provide different fares at different prices" depending through which channel they were bought.
The new Code, which replaces the one first introduced in 1989, is based on "partial deregulation with specific provisions for parent carriers."
It said that this was the "most favourable outcome in terms of increased competition, safeguards against competitive abuse, neutral, transparent and comprehensive information for consumers and the promotion of rail transport in CRS displays."
The EC said it had ruled out full de-regulation, after the US model, because "many corporate travellers remain highly dependent upon the single distribution channel constituted of the travel agents and the CRSs."
This was particularly true of travellers in EC states where Internet penetration was low.
In these circumstances, the EC said, the risks of abuse were higher.
There are nine safeguards written into the new Code to prevent against “potential competitive abuses, especially in the case of close links between CRSs and transport services providers.”
Among these safeguards are:
* prevention of exclusive deals between CRSs and agents to protect the neutral advice of agents
* prevention of CRSs identifying travel agents in MIDT
* obligation of CRSs to separate clearly their CRSs from any airline internal reservation system
* prevention of CRSs of giving their parent carriers preferential treatment
* obligation of CRSs to provide neutral and non-discriminatory displays
* prohibition of parent carriers to link incentives or disincentives to the use of a specific CRS.
The EC defined a parent carrier in its new Code as "any air carrier or rail-transport operator which directly or indirectly, alone or jointly with others, owns or effectively controls a system vendor.”
It defined "effective control" as having a "decisive influence."
Jacques Barrot , the EC's transport commissioner, said the new code would lead to better deals for the traveller.
"More competition in this market means lower distribution costs and airlines offering more travel options via the CRSs.
"Consumers who use the services of a travel agent for their airline bookings will enjoy an increased offer while still being protected against any abuse or discrimination."
But at a press conference in Brussels, the EC spokesman made clear that it did not regard Air France, Lufthansa and Iberia which between them have a 46.7% holding in Amadeus, as being parent carriers of that CRS.
C-FARE, an organization which has campaigned for de-regulation with safeguards, said this decision had created a "giant loophole" in the new Code.
Brandon Mitchener, its executive director, said: "By failing to clarify the definition of 'parent carriers' the European Commission has adopted a decision that may not actually apply to anyone, thereby depriving European consumers of the protection that the Code was created to provide."
C-FARE said that Amadeus, Europe's biggest CRS and its three airline owners dominated both the air travel and travel distribution markets in many European markets including Germany, France and Spain.
But the EC had "given a regulatory green light to consolidate their existing dominant positions."
The new Code was also criticised by ECTAA and GEBTA, the two European organisations representing, respectively, leisure and business travel agents.
Jan Van Steen, president of ECTAA, said: "In the European environment where markets for air transport and for CRSs are still fragmented and subject to dominant positions, liberalisation of content jeopardizes the functionality of a complete and neutral display of fares through CRSs.
"This could bring us 30 years back, where information was completely decentralised. With an increasing offer of routes and fares, losing a centralised information tool would be detrimental for agents and their customers."
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