No C 56/32 Official Journal of the European Communities 6. 3. 89 
Opinion on the proposal for a Council Regulation on a code of conduct for computerized 
reservation systems (CRS) (!) 
(89/C 56/13) 
On 14 November 1988 the Council decided to consult the Economic and Social Committee 
under Article 84(2) of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Transport and Communications, which was responsible for preparing the 
Committee's work on the subject, adopted its Opinion on 7 December 1988. The Rapporteur 
was Mr Moreland. 
At its 261st plenary session (meeting of 14 December 1988) the Economic and Social 
Committee adopted the following Opinion unanimously. 
1. Background 
1.1. There has been increasing concern that the 
development of the computer reservation systems (CRS) 
owned by airline companies may operate more in the 
interests of promoting airlines than in ensuring that 
travel agents are able to present a comprehensive and 
objective display of airline services available. 
1.2. This concern has been heightened by criticism 
of CRS owned by airlines in the USA. This has led in 
Europe to two developments. The first is the drafting 
of a code of conduct by the European civil aviation 
conference (ECAC) which included all the EC Member 
States and the European Commission with participation 
by other interested bodies such as the airlines and 
consumer organisations. The objective of the code is to 
ensure that CRS are used 'in a fair, non-discriminatory 
and transparent way with a view to avoiding misuse of 
these systems, so ensuring fair competition between 
airlines and protecting the interests of the consumers 
of air transport' (Paragraph 2, principles for ECAC 
code of conduct for computer reservation systems). 
1.3. Secondly, as a result of a request from the 
Council as part of the air transport agreement of 
December 1987, the Commission agreed in July 1988 
and published in the Official Journal (2) a block exemp­
tion Regulation on certain categories of agreements 
between undertakings relating to CRS for air transport 
services. (This followed an Opinion from this Com­
mittee in July.) 
1.4. The block exemption laid down conditions for 
those computer reservation systems owned jointly by 
two or more airlines (in practice 'Amadeus' and 'Gali­
leo' in which the European national carriers are 
involved). 
(!) OJ No C 294, 18. 11. 1988, p. 12. 
(2) OJ No L 239, 30. 8. 1988. 1.5. The Commission has now proposed a code of 
conduct covering all computer reservation systems 
operating in the Community. It is essentially consistent 
with, but more comprehensive than, the block exemp­
tion. However it is not entirely consistent with the 
ECAC code of conduct. 
2. The main features of the Commission's proposal 
The main features are as follows: 
a) All CRS operating in the Community are covered 
i.e. all US owned systems operating in the Com­
munity are included (Article 1); 
b) To the extent that facilities are provided by system 
vendors all air carriers can ensure that their sched­
ules, fares, rates and availability are included in all 
CRS systems (Article 3); 
c) Fees must be non-discriminatory and cost related 
(Articles 3 and 9); 
d) Airlines participating in a CRS system shall have 
the right to terminate contracts with the systems 
vendor without penalty on giving notice which need 
not exceed six months to expire no earlier than the 
end of the first year (Article 3). 
Similarly, travel agents can terminate contracts on 
giving 3 months' notice to expire no earlier than the 
end of the first year (Article 9); 
e) Procedures, fees, systems facilities, editing and dis­
play criteria used shall, on request, be provided to 
all interested parties (Article 3); 
f) Information contained in a CRS must be compre­
hensive, non-misleading and transparent (Article 4); 
g) Displays must not be biased (Article 5); 
6. 3. 89 Official Journal of the European Communities No C 56/33 
h) Information generated by the CRS shall be made 
available on an equal basis to all relevant carriers 
(Article 6); 
i) Systems vendors need not apply the obligations of 
the code to carriers with ownership external to the 
Community if a CRS system owned by that carrier 
does not conform with these obligations (i.e. a reci­
procity clause) (Article 7); 
j) No commissions or incentives can be given by an 
airline for specific use of its CRS system (Article 8); 
k) Passenger (scheduled and non-scheduled) cargo and 
mail are included in the conditions of the regulation 
(Articles 2 and 3); 
1) Code-sharing flights shall be treated as connecting 
flights unless the code-sharing arrangement guaran­
tees embarkation on the connecting flight, in which 
instance code-sharing flights may be displayed in 
preference to normal connecting flights. 
3. General comments 
3.1. Subject to the comments in Sections 4 and 5, the 
Committee welcomes the Commission's proposal as a 
means of ensuring that travel agents can provide the 
travelling public with objective and comprehensive air 
travel information. 
With the advantage of hindsight it is arguable that the 
consumers would have benefited if Community action 
had been to forbid airlines to be owners of CRS systems 
and to encourage ownership by travel agents and/or by 
independent operators. 
Such moves are now impractical. The code of conduct 
should ensure that CRS operate in the interest of the 
consumer while protecting the airlines' legitimate con­
cerns over ticketing. Nevertheless the Commission 
should watch the situation carefully, and should abuse 
occur, examine the whole issue of ownership. 
3.2. The Committee believes that the establishment 
of a code of conduct will have considerable influence 
on the operation of CRS both inside and outside the 
Community. It should be used as a basis for negotiation 
in international fora to establish an international code. 
4. Specific comments 
4.1. Preamble (sixth indent) 
In the event of no change in the proposal regarding 
freight and charter services (see clause 4.2) then this 
preamble should read: 'Whereas such systems can, if properly used, provide 
an important and useful service to air carriers, travel 
agents, tour operators, freight forwarders ...' 
4.2. Article 2 (i) 
As the prime purpose of the proposal is to benefit 
passengers, the Committee questions the necessity of 
including cargo and mail service. It considers that the 
priority should be to ensure CRS have a comprehensive 
and fair display of passenger services. (Should cargo be 
deleted, references in later articles to 'rates' and 'airway 
bills' should also be deleted.) 
The development of non-scheduled services providing 
'seat only' fares is a welcome benefit for the travelling 
public and it is regrettable that some Member States 
still prevent such services. The Committee is concerned 
that the inclusion of these services in this proposal 
may have a reverse effect from what is intended, i.e. 
strengthen resistance to their development. 
4.3. Article 3 (i) 
This clause effectively states that if one carrier is 
allowed to list its non-scheduled services then all must 
have the possibility. The Committee questions the prac­
ticality of this requirement at this stage. There seems 
no immediate necessity to include this as the complaints 
relating to CRS are centered on scheduled rather than 
charter flights. 
4.4. Article 3 (2) 
The Committee maintains its view—as expressed in its 
Opinion on the block exemption—that fees should be 
published as this would remove any attempt to be 
discriminatory. The argument that publication would 
encourage collusion seems fanciful. 
There is a risk that fees could depend on volume and 
thus penalize small carriers unless there is a more precise 
definition of 'service provided'. 
4.5. Article 3 (4) 'current technical limitations' 
The vagueness of the phrase should give rise to a variety 
of interpretations. The Commission could spell this out 
in detail. 
No C 56/34 Official Journal of the European Communities 6. 3. 89 
4.6. Article 4 (2) 
Should read 'inaccurate, misleading, incomplete or ...' 
4.7. There should be a clause (possible on Article 4.5) 
stating 'Participating carriers must be assured the right 
to buy only those services from the systems vendor that 
they want to buy and not to be forced to buy a standard 
package'. 
4.8. Article 5 (4) 
The Committee is concerned that the procedure for 
reviewing the provisions of the display annex makes no 
provision for consultation with the interested parties 
i.e. airlines, consumers etc. but seems concentrated on 
review by national civil servants although the issues are 
not going to be ones that involve national interest. 
Further the review does not have any regard to review 
by democratically based institutions, i.e. the European 
Parliament or by the Economic and Social Committee. 
While the Committee can understand that, in excep­
tional circumstances, there could be a need for decisions 
to be taken quickly, nevertheless the Committee pro­
poses that the normal democratic procedures of the 
Community be followed in which the Council takes a 
decision following an Opinion from the Parliament and 
the Economic and Social Committee. 
As the ECAC procedures incorporate both the Member 
States and the interested parties (i.e. airlines, con­
sumers) and the Commission, the Committee proposes 
that the Commission should automatically review and 
make proposals for changes to the Annex on the 
occasion ECAC produces its own proposals. 
4.9. Article 6 
The Committee assumes that this clause meets travel 
agents' concern about the security of customer infor­
mation which may be stored on a CRS. The Committee 
agrees that such information belongs to the travel agent 
and should not be accessed by the CRS owners without 
customer approval and that it should also be secure 
from retrieval by competing agents. 
4.10. Article 7 
Unfair practices by third country-based airlines should 
not be allowed to continue unhindered when at the 
same time they can benefit from a fair display on 
a European CRS. Nevertheless the use of incomplete displays as a consequence of retaliatory action is not in 
the interests of the consumer who wants to be able to 
make the best choice from available options and not 
be led to one airline because of the lack of reciprocity 
in another's system. The Committee notes that Item 4 
of 'General Criteria' of the Annex indicates that travel 
agents must be informed if a display is not comprehen­
sive. The Committee believes that Article 7 also should 
include a requirement for the systems vendor to inform 
all travel agents when specific items are removed from 
the display on account of 'reciprocity'. 
The Committee supports Article 7.2 but proposes that 
in exceptional circumstances, on application from a 
system vendor, the Commission may authorize action 
in less than 14 days after application. 
4.11. Article 9 
The Committee assumes that under this Article (9.4) 
liquidated damage clauses based on revenue foregone 
rather than cost incurred are forbidden. Fortunately 
such clauses, which are a crude example of airlines 
forcing continual tie-in arrangements, have not spread 
to Europe to date. Nevertheless, given the US experience 
of such clauses it can only be of value to ensure this 
situation continues by banning their application in this 
code. 
The Committee notes that the proposed termination of 
contracts is up to one year. This is in line with the 
block exemption but differs from the period agreed in 
ECAC (3 years). The Committee emphasizes that the 
Council should fix a time period that is reasonable in 
terms both of competition between systems vendors 
and of ensuring a reasonable time for large initial costs 
to be covered. 
4.12. Article 10 (3) 
The Commission should, also, report annually how 
many complaints it has received and how many have 
been upheld. 
4.13. Article 11 
The Committee questions whether the words 'without 
delay' are not unduly vague and that a precise time e.g. 
1 month should be given. 
The Committee notes that there is no provision for the 
Commission to take up problems of 'reciprocity' with 
third countries. The absence of any provision for the 
6. 3. 89 Official Journal of the European Communities No C 56/35 
Commission to act on behalf of the Community in 
taking up such problems with third countries appears 
a serious gap in the proposal. 
4.14. Article 21 
The Committee believes that the dates proposed should 
be altered as the Council decision on this regulation 
will clearly be after December 1988. In any event a 
three months transitional period is an inadequate time 
for airlines, travel agents and other interested parties 
to adapt displays etc. to the rules of the code of conduct. 
4.15. Annex 
4.15.1 General criteria 
4.15.1.1. As 'principal displays' are 'comprehensive' 
according to Article 2 h) of the proposal, either clause 4 
is redundant or Article 2 h) should be revised. 
4.15.2. Criteria for scheduled air services 
4.15.2.1. The Committee is concerned that the rank­
ing be precise particularly as lack of precision has lead 
to abuse in the USA. In this context it notes the contrast 
to the precision in the ECAC code. In this context the 
principal display should be as follows: 
a) All non-stop flights between the city pair concerned 
should be in order of departure time alone (as 
including both departure and arrival time could give 
rise to manipulation); 
b) Other direct flights (i.e. stopping flights) and all 
connection flights should be in order of elapsed 
journey time as this is likely to be the most impor­
tant point for the traveller. (Again including both 
departure and arrival time could give rise to manipu­
lation). 
4.15.2.2. The Committee questions the preference 
given to code-sharing based on guaranteed embarkation 
on a connecting flight (as 100% guarantee seems 
impossible to provide) and suggests that all code-shar-
Done at Brussels, 14 December 1988. ing flights be treated as connecting flights (as in the 
ECAC code). However, an asterisk or other identifying 
mark on the screen could indicate these connecting 
flights for which a guarantee is given. 
5. Other considerations 
5.1. There are a number of points that have not been 
taken into account by the code which the Committee 
believes cannot be ignored and should be the basis of 
Community legislation. 
5.1.1. Both the ECAC code and the Commission's 
code are based on schedule displays. They do not take 
into account the potential for price to influence the 
display. The Committee would hope system vendors 
would be encouraged to introduce secondary displays 
based on price and this is an option which consumers 
would welcome. 
5.1.2. Vendors should be prepared to supply travel 
agents with software and reservation links but agents 
should not be forced to use the equipment supplied by 
the vendors. 
5.1.3. As a consequence of the 'General criteria' (4) 
of the Annex the vendor must clearly state on the 
display where a display is not comprehensive. Further 
the Committee considers that the travel agent has a 
duty to inform the customer if a display is not compre­
hensive. Indeed bearing in mind this proposal, the pro­
posal on 'Package travel' and the overdue Commission 
investigation of the agency system of the international 
air transport association (I AT A), there is an increasing 
case for a code of conduct related to travel agents 
including a legal obligation for the travel agent to offer 
'best advice' to the customer. 
5.1.4. Given that the code is being devised in the 
circumstances of 1988 and that the requirements of the 
code (or for a code at all) may change swiftly, the 
Commission should be obliged to undertake a full 
review in, say, 3 years. In any event it should take into 
account the review which ECAC is obliged to undertake 
in 3 years. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE