CRS codes of conduct are under fire on both sides of the Atlantic. Canadian proposals for regulation have come under attack from European airlines, while the European Commission is set to appoint independent consultants to investigate charging practices within its established code.
The Association of European Airlines claims the latest version of Canada's proposal is substantially different, and more costly, than the 'very promising' draft released last June. However, Transport Canada refutes that the policy has changed dramatically and stresses that it has yet to be finalised.
The AEA claims the definition of a system will disadvantage carriers wishing to display only their own information, classifying them as a CRS and therefore requiring a neutral display. But Valerie Dufour, CRS team leader at Transport Canada, says the AEA is wrong. 'This has nothing to do with carriers and their own sales offices; their distribution system is not considered a CRS.'
The Canadian draft also makes it mandatory for airline owners of a CRS to participate at the same level in competing systems. A similar voluntary clause exists in the European code and while the AEA agrees all CRSs must have equal information, it is concerned about the added cost to its members. One European consultant says this would amount to an increase of 7 per cent in the case of Sabre.
The 'elimination of the protection of data access' is the AEA's other major concern. However Dufour disputes there is a flaw with the Canadian proposal: 'There is nothing in this proposed regulation that allows a single owner to have privileged access to marketing, system or sales information.'
Meanwhile, the European code is under fire from both European airlines and the Orient Airlines Association, amid claims that charging principles are not being adhered to and costs are soaring.
The consultants, to be appointed by the end of February, will consider net segment versus transaction based charges and look at current practices of charging for passive bookings and at higher functionality rates.
The OAA says passive bookings cost its members $30 million annually or 30-35 per cent of total CRS cost. The European consultant estimates as many as 40 per cent of bookings charged at the higher functionality level are actually booked at a lower, less costly level.
But total CRS charges represent only a minor part of total distribution costs, argues Hans Jorgensen, director of sales and vendors services at Amadeus. 'Booking fees represent only 2-3 per cent of the total distribution cost, while travel agent commissions represent about 50 per cent.'
But he acknowledges that CRSs are aware of the need to confer with the airlines. 'I will not rule out examining our charges to the airlines.'
But he acknowledges that CRSs are aware of the need to confer with the airlines. 'I will not rule out examining our charges to the airlines.'
Source: Airline Business
