Industry applauds draft Kirkhope report

A broad cross-section of European business travel
industry stakeholders have transmitted a Signatory Letter to Members of the
European Parliament urging them to vigorously support a draft report by the
Committee on Transport and Tourism regarding revisions to a Code of Conduct, which
governs global distribution systems.The report, written by Rapporteur
Timothy Kirkhope, appropriately clarifies the definition of “parent carrier” and to
whom the Code applies, and is a major step forward in protecting European consumers
from higher airfares.

“We are delighted to see that the Kirkhope report clearly recognizes the wider issue
of potentially inappropriate influence of distribution systems by direct or indirect
travel vendor capital and/or board representation. We wholeheartedly support the
recommended amendments to the regulations,” stated Paul Tilstone, Executive
Director, Institute of Travel Management, and a signatory to the letter.

For nearly 20 years the existing Regulation has governed the behaviour of the GDSs
and of the airline owners of such systems, the parent carriers. History has
demonstrated the painful lesson that whenever airlines hold financial interests in
CRSs they inevitably will engage in competitive abuses in both the airline and
airline distribution sectors - unless this misconduct is effectively restrained by
clear rules. Since nearly all corporate travel to this day is booked by travel
agencies equipped with GDSs, the issue of getting the Code right is of especial
significance to business travellers.

International Airline Passengers Association Industry Affairs Spokesman Jonathan
French stated, “Like many in the industry, I was astonished that the new
understanding of a GDS “parent carrier” could be loose enough to allow joint
ownership by 3 airlines of 46% of a GDS to pass without comment, which would
effectively mean that the Code of Conduct becomes redundant.  It’s pleasing that the
European Parliament has brought some clarity and a clear definition to the table
with this amendment, which is clearly in the interests of both travel agents and

The Signatory Letter states: “Parliament has the opportunity to correct the parent
carrier loophole created by the Commission to avoid detrimental effects for
travellers across the EU. Without amendment travellers will face a less competitive
environment for air fares, and many small/medium-sized travel agencies will find it
increasingly difficult to remain competitive while operating rival systems to
Amadeus. Accordingly, we call on the Parliament to close this dangerous loophole by
amending the definition of parent carrier so as to leave no doubt that, given their
ownership interests in Amadeus and their representation on its Board, Air France,
Iberia, and Lufthansa remain parent carriers and must respect the historic
safeguards against competitive abuses that have long applied to parent carriers.”


Business travelers call on all Members of Parliament, including those from Germany,
France and Spain, to ratify the Kirkhope report and thereby put the interests of
European consumers first.