Opinion: Regulators must enforce EU law on airfare price transparency

The European Technology and Travel Services Association (ETTSA) is concerned about the decision of another large European airline group to impose a substantial surcharge on tickets booked through independent intermediaries.

Two years after the Lufthansa Group, BA and Iberia have announced their intention to impose a distribution charge on tickets booked through a neutral distribution channel – the GDS/travel agency channel on which consumers rely to look for the best-available travel option.

This charge will not apply to BA-controlled channels.

The mere mechanism of a charge making the neutral and independent channel less attractive for consumers is a worrying trend that goes against the principles of transparency and neutrality in airline distribution established by the EU decades ago.

Twenty-five years of a liberalised EU aviation market have promoted competition, the arrival of new entrants and more choice for consumers.

The policy has generally been a great success resulting in more affordable tickets for families and businesses.

However, recent years have seen challenges arise against this successful policy. A consolidation of the European aviation industry has produced more powerful and larger airline groups, and the airline alliances have been allowed to increase their cooperation – as opposed to having to behave like competitors.

This consolidation has put airlines in a position of great strength in their ‘home markets’, which has increased their incentives and power to push for more direct distribution and drive consumers away from the neutral and independent market.

The planned BA/Iberia charge and earlier Lufthansa surcharge are a result of a strategy to drive consumers away from the platforms where they are able to compare travel options in a neutral environment and on to airline-controlled platforms where biased content makes it very difficult for consumers to know whether they are buying the ticket that suits them best.

ETTSA is composed of technology companies and promotes the advancement of technology improvement in travel distribution for the benefit of consumers.

The association has been warning against this development for years, but action from the EU to protect its own principles of neutrality and transparency has yet to be seen.

We urge the European institutions to remember these principles and to protect them with the regulatory tools available to it before it is too late.

In addition to enforcement of the CRS Code of Conduct, these tools should certainly include a probing investigation into whether the promised benefits for consumers that were used by airlines to obtain approvals of their mergers and alliances have in fact materialised.