Travelocity Supports Changes for Opodo.

3rd Dec 2001

Travelocity has said it supports a preliminary ruling by the European Union requiring changes in the business plans of Opodo.

The statement, coming the day before launched on Friday, said that Travelocity shares the concerns of the European Union about the anti-competitive potential of Opodo, including the EU`s “concern that the shareholders might use their strong position on these related [air transport] markets to leverage market share on the travel agency services market.” [Official Journal of the European Communities, Notice Pursuant to Article 19 (3) of Council Regulation No 17, Case COMP/38.006 ? Online Travel Portal, 20.11.01 (2001/C 323/03)] Travelocity endorses a set of operating guidelines the EU has set forth, which are designed to monitor the way Opodo operates in the marketplace. The guidelines prevent Opodo from requiring any airline to provide it with web-only fares as a condition for participating in the new site.

Travelocity has also called for a clarification of these guidelines and believes that the controversial “most favoured nations” (MFN) clause that limits competition between Opodo and other travel agencies should be unquestionably excluded from Opodo`s participating carrier agreements.

“The MFN clause has the potential to cause anti-competitive behaviour by binding participating carriers into a contractual agreement to provide Opodo with preferred access to fare information, including all fares they provide to independent distributors,” said Andrew Steinburg, General Counsel, Travelocity.

“The MFN requirement reduces the incentive and the ability of any airline participating with Opodo to compete with each other on price and is likely to exclude independent travel agencies from the market” added Steinburg. According to Travelocity, the MFN clause discourages competition, is likely to limit consumer choice and encourage higher prices. It is Travelocity`s hope and expectation that during the 30-day comment period, the guidelines and restrictions applicable to Opodo and the participating carriers will be further scrutinised and Opodo will only be granted operating rights if its potential for anti-competitive behaviour is eliminated.


Travelocity also calls for the United States Departments of Justice and Transportation in their investigation of Orbitz, the US airline owned travel joint venture of United, American, Continental, Delta and Northwest, to take note of the EU`s actions this week.



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