Pan-Europe coalition demands EC act against Lufthansa, IAG

A pan-European coalition of industry and passenger associations has called for an EU competition inquiry into airline consolidation. It has also demanded transport commissioner Violeta Bulc “defend an open aviation market” against the GDS charges imposed by Lufthansa and British Airways’ … Continue reading →

A pan-European coalition of industry and passenger associations has called for an EU competition inquiry into airline consolidation.

It has also demanded transport commissioner Violeta Bulc “defend an open aviation market” against the GDS charges imposed by Lufthansa and British Airways’ owner IAG.

The associations argue the GDS charges amount to “discrimination against neutral, independent distribution” and “threaten consumer choice”.

They include the European Technology and Travel Services Association (Ettsa), the UK Guild of Travel Management Companies (GTMC), the Global Business Travel Association (GBTA), the Institute of Travel Management (ITM), the European travel agents and tour operators’ association (ECTAA), the European Passengers’ Federation, the German trade association VDR and 22 other national associations.

Their call to the EC follows IAG’s announcement last month that it will impose an £8 fee on GDS bookings of BA and Iberia fares from November.

Lufthansa imposed a €16 GDS charge on all bookings in September 2015.

In a letter to Bulc, the signatories note: “The Lufthansa Group carriers’ distribution strategy met no response from the EC so far and that has encouraged other large carriers to follow.

“[We] have for two years warned against this dangerous development. It has now happened in the form of a new distribution strategy announced by IAG . . . [which] like Lufthansa’s aims at discriminating against the transparent and neutral channel and forcing consumers (and agents) to book tickets on British Airways and Iberia through IAG’s own distribution systems.”

They warn: “The more large airlines join this practice, the more difficult it will be to sustain an independent and neutral distribution channel where consumers can compare airlines objectively.”

The associations insist: “The EC needs to act now. The Commission has tools to defend transparency and neutrality in airline distribution.”

They point out the Commission has “for nearly two years, been examining complaints against the practices of the Lufthansa Group under Code of Conduct [rules] adopted to avoid a situation where large carriers take distribution hostage to promote their own offers . . . to the detriment of competition and consumer choice.

“We urge you to enforce the EU legislation designed to protect transparency, competition and consumer choice, and to take action.”

The letter also urges the EC “to examine the level of cooperation between airlines . . . in part through mergers and acquisitions, in part through an increasing amount of competition-reducing arrangements between airlines . . . to ascertain whether this damages consumer interests”.