Published on Tuesday, June 20, 2017

EU urged to block BA and Lufthansa booking fees



A coalition of trade bodies and consumer groups has written to the EU to demand an inquiry into what it sees as non-competitive practices by airlines, including GDS charges imposed by Lufthansa and British Airways.

In an open letter to transport commissioner Violeta Bulc, the coalition also asked for the EU to prevent consolidation of the airline industry - including alliances and codeshare agreements - from damaging competition.

Signatories to the letter included, amongst others, the European travel agents and tour operators' association ECTAA, the European Passengers' Federation, and the UK Guild of Travel Management Companies.

"As representatives of independent distributors and consumers of airline services, we write to express our grave concern with the growing threat to transparency, competition and consumer choice in the airline market, and to ask for your support to defend the values of an open and competitive aviation market laid down by the European Union in the 1990s," they wrote.

They warned airline surcharges and further consolidation were 'threatening to roll back the positive results achieved by 25 years of liberalisation, and bring us back to a market with a few, dominant players, less choice, and even less transparency', which would inevitably lead to higher prices, they said.

The letter follows BA-parent IAG's announcement that it intends to introduce an £8 fee on BA and Iberia flights booked via GDSs from November.

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

The coalition said these were part of efforts by airlines to limit transparency in airline distribution.

"Unfortunately these practices have met no response from the European Commission so far and, as expected, that has encouraged other large carriers to follow the example of the Lufthansa Group," it said.

"The signatories to this letter have for two years warned against this dangerous development, but it has now happened in the form of a new distribution strategy announced a few days ago by IAG.

"Like Lufthansa's strategy, it 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.

"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 strategies implemented by these large carriers make competition a matter of designing clever, non-transparent distribution mechanisms, rather than competing on price and service."

It urged the EU to enforce existing legislation designed to 'avoid a situation where large carriers take distribution hostage'.

It also asked for the EU to 'carefully examine' airline alliance and codesharing agreements to see whether extension co-operation among previously competing airlines was damaging to consumers.

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