On invitation of the Association of Croatian Travel Agencies, UHPA, the 88th bi-annual meeting of ECTAA took place on 20 and 21 November 2003 in Zagreb, Croatia, known for its rich cultural and natural heritage….
On invitation of the Association of Croatian Travel Agencies, UHPA, the 88th bi-annual meeting of ECTAA took place on 20 and 21 November 2003 in Zagreb, Croatia, known for its rich cultural and natural heritage. During the two-day meeting, delegates from the 25 Member associations of ECTAA discussed current EU affairs and future actions to be taken by the European association and its Members.
As a matter of priority, the Members of ECTAA reviewed the current situation of the complaint issued by ECTAA and GEBTA, the Guild of European Business Travel Agents, in October 2002 against IATA and IATA airlines for non-compliance with the EU competition legislation (see prior press release issued on 18 October 2002 available on www.ectaa.org under ‘publications’). The European Commission responded to our complaint by instructing IATA to review 4 areas, which raise serious competition concerns. They concern in particular (1) accreditation of travel agents, which are too diverse across Europe and are disproportionate compared to the way travel agency business is conducted nowadays, (2) BSP rules, which currently restrict freedom of travel agents to sell outside their home market, (3) STP Resolutions, which impose illegal territorial restrictions and (4) access to fares. IATA reacted to this preliminary conclusion of the Commission by introducing a new Committee to revise the accreditation criteria. At the meeting in Zagreb, the Members of ECTAA reconfirmed their willingness to negotiate with IATA on the accreditation criteria under the condition that the outcome of the negotiations are mutually agreed by the agents and airlines and not unilaterally modified by airlines thereafter, as has been the case in past negotiations with IATA. For more details on the history of the IATA negotiations and the resulting complaint, please consult a presentation given by the lawyer of ECTAA and GEBTA, Mr Dugardijn, at the GEBTA annual conference available on www.gebta.org under ‘what’s new?’ The ball is now in the court of IATA.
ECTAA Members also reviewed the new rules on the denied boarding compensation regulation proposal to be officially adopted by the Council and the European Parliament in December 2003. The new Regulation grants passengers a number of rights in case of denied boarding, cancellations and delays. In future the provisions will apply to both seat-only passengers as well as passengers traveling as part of a package. These provisions are seriously flawed, as it does not take into consideration the fact that tour operators function in a completely different way than scheduled airlines; compensation amounts bear no relation to fares paid in the leisure market and the obligations resulting under this regulation may contradict the package travel Directive when the passenger decides to make use of his right to reimbursement and thus effectively cancels his package. ECTAA is however pleased that the EU institutions have agreed to exclude travel agents from the scope of application of the Regulation, as travel agents only act as intermediaries in the sale of packages and air transport.
ECTAA Members also expressed their disappointment with the fact that the Commission has not decided to take firm action by initiating legislation to provide passengers with better protection against airlines’ financial failures. In the current economic climate, where more than a third of the airlines represented by the Association of European Airlines showed a net loss for the year 2002, there is a real risk of airline failures, against which passengers have no efficient recourse. Instead, the Commission has decided to carry out another study to assess the need for a mandatory guarantee system and the pro and cons of such a system. ECTAA has been working for a long time on an industry plan developed in conjunction with IATA. Such a protection scheme would not have been excessively expensive for the traveling public (a small fee of approximately 1 € raised on each issued ticket). But the project failed to materialise, as IATA and the airlines have unilaterally decided to abandon the project.
Apart from air matters, ECTAA Members also reviewed a number of legal and fiscal matters. Of particular concern is the revision of the special VAT scheme for the provision of travel services. The Commission adopted a Directive proposal in February 2002, which aimed to simplify, modernize and ensure the uniform application of the EU VAT legislation. ECTAA supported the initial proposal adopted by the Commission. However, the current Council compromise text differs substantially from the initial proposal and causes a lot of concern for travel services providers, who will be subject to competition distortions from travel service suppliers benefiting from the normal VAT arrangements and reduced VAT rates.
On a more positive point, ECTAA welcomed a new Affiliated Member, the Association of Travel and Tourism Agents of Malta, FATTA, which has decided to join ECTAA in view of the EU enlargement. ECTAA has also changed the status of the Association of Croatian Travel Agents from observer to affiliated membership in preparation of Croatia’s accession negotiations to the EU scheduled to start next year.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
