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Corporate consumers worldwide say no to premature EU CRS deregulation

The Business Travel Coalition (BTC) called upon the European Commission (EC) to heed the concerns of 119 travel associations and executives from Europe and around the world whose vital interests are…

The Business Travel Coalition (BTC) called upon the European Commission (EC) to heed the concerns of 119 travel associations and executives from Europe and around the world whose vital interests are directly threatened by potential abandonment of key consumer safeguards in the computer reservations systems (CRS) industry in Europe.



These organizations, Signatories to an industry joint-filing to the EC, include the United Nations, the International Airline Passengers Association, the Scottish Passenger Agents’ Association, Adidas Group, IKEA, Thales, NYS Corporate Ltd., E.ON AG, Dow Europe, DuPont, NATS Ltd., Kimberly Clark, Pfizer and Bristol-Myers Squibb.



BTC Chairman Kevin Mitchell stated, “For corporate travel managers, premature deregulation of the CRS industry in Europe represents an ominous threat to full airfare content that would needlessly plunge managed travel back into the distorted chaos of the pre-rules 1980s. So vital is access to full airfare content that travel managers have joined together across continents, industries and cultures to express to the EC the universality of the importance of complete and efficient access to all airfares offered in the marketplace and of the need to protect that access with bright line rules for as long as airline ownership of a CRS remains.”



Nancy McKinley, Director, Consumer and Industry Affairs, International Airline Passengers Association agreed, and stated, “Our members are well protected by the CRS Code of Conduct. These airline passengers generally do not work for mega corporations with large purchasing volumes and travel procurement expertise. They are employed by small and mid-size enterprises (SMEs) and as such rely on unbiased travel agents with access to all competitive airfare offerings. In the EU there are 23 million SMEs that account for 75 million jobs and 99% of all enterprises; they are responsible for fully half of all business trips. The EC must continue to protect these consumers’ interests!”



UK-based QA Business Travel Ltd, Managing Director, Kevin Thom added, “To understand the imperative of maintaining core consumer protections, one has only to look at the history of vertical integration of airlines and CRSs before the Code of Conduct became law in 1989. Airlines abused their CRS ownership positions with impunity. Prematurely repealing the content-related rules will only frustrate travel agents’ and corporate travel managers’ ability to secure valuable content giving parent airlines carte blanche to withhold content from CRSs, other than the one they own. So long as airlines own a CRS in Europe, rules are necessary.”



According to BTC, it’s imperative not to discount what history has plainly taught. Vertical integration between airlines and CRSs leads inevitably to double dominance of both the airline and distribution markets – a dangerous phenomenon that hurts consumers who are deprived of content, as well as innovation and choice. CRS rules break the negative impact of vertical integration with the least amount of impact on competition. This is the proven approach, recognized and endorsed in the Brattle Group Report commissioned by the EC itself.



BTC’s Mitchell, observed, “The opportunity is to remove those CRS rules that have outlived their usefulness and keep the core content rules that are critically important – especially the rules on mandatory participation and against commission tying. Those of us who represent the interests of corporate travel managers are passionate and unified in support of these essential ‘full content’ rules. We call on the EC to give careful consideration and top priority to our consumer views as it decides this major regulatory issue.”

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