There is little agreement among airlines on either side of the Atlantic on whether the European Commission's CRS Code of Conduct should be amended or abolished altogether.
The airlines, along with GDS companies and organizations representing travel agencies and consumers, weighed in on the issue following a call for public consultation by the EC, which was closed on April 27.
American Airlines said the EC should "move toward deregulation" but should "prohibit or restrict inherently anticompetitive tools," such as parity clauses, which require airlines to participate at the same level in all systems, worldwide participation and fare bias.
"CRSs have abused parity clauses in an effort to prevent the introduction of rationality into the marketplace," it said. It cited Amadeus' argument that the parity clause in its Participating Carrier Agreement with American and Northwest prohibited the airlines from imposing cost-recovery charges on agencies that did not opt in to "a lower-cost" distribution model. "All parity clauses -- whether dealing with fares, charges, incentives or otherwise -- should be banned," American said.
United called for full and immediate deregulation.
Acknowledging that Air France/KLM, Iberia and Lufthansa still maintain minority stakes in Amadeus, United said that "while the parent carriers may benefit as ordinary shareholders, they will be forced to negotiate with Amadeus at arms' length in the same manner as the more than 100 other airlines that participate in Amadeus."
Even if the parent carriers tried to leverage their minority ownership to engage in abuse in their home markets, competition authorities can counter their actions with Article 82 of the EC Treaty, United said.
BMI stated that "competition law is not a particularly strong deterrent." The carrier said it would prefer to see the current Code of Conduct updated and revised to offer a "degree of protection" from "the threat of any potential abuse."
Gulf Air called for the maintenance of "specific obligations related to the ownership of the GDSs." On the pricing issue, "the market is ready and needs a greater pricing freedom," it said.
KLM and other carriers noted that deregulation in the U.S. has created an imbalance in the global marketplace. U.S. carriers, it said, "were able to capitalize the benefits of liberalization on their home markets, while European carriers were at a disadvantage, as the low level of presence on the U.S. market did not allow them to negotiate advantageous fees with the GDSs.
It noted that Europe remains the only market that is strictly regulated, "putting European airlines at a competitive disadvantage vis-à-vis the rest of the airline community." Comments from the GDS companies held few surprises.
Amadeus favored a full repeal of the Code of Conduct. It also cited the U.S.-Europe imbalance, saying it "cannot offer the same flexible pricing in the EU that the U.Ss-based CRSs are able to offer in their home market."
Galileo and Worldspan both argued for retaining the rules that apply to preventing abuses where airlines maintain any ownership of a system. Sabre's comments were kept confidential at its request.
ITA Software said it has been hampered in its attempt to gain "quality data" from certain airlines in Europe and said the carriers that retain stakes in Amadeus "continue to have deep commercial, technical and political connections with Amadeus" that result in "the exclusion of other providers" from access to information.
The Business Travel Coalition and the Association of Corporate Travel Executives called for partial deregulation, with a full sunset of the rules when airlines no longer have any stake in a GDS company.