EN Official Journal of the European Union CE 84/779

(2004/C 84 E/0876)

WRITTEN QUESTION E-0351/04

by Roberta Angelilli (UEN) to the Commission

(12 February 2004)

Subject: Travel agencies: serious difficulties for operators and customers

Travel agencies are currently experiencing serious difficulties as a result of the crisis in the tourism sector, which suffered a recession as a result of the attacks on the Twin Towers in 2001, fears of the spread of infectious diseases, price increases linked to the introduction of the euro and fears of air disasters and wars. The situation is now becoming worse because many European airlines have decided to substantially cut the commission paid to agencies, in order to reduce their debts and meet the needs of the market. The recent crisis affecting Alitalia, which led to it to take such a decision, was only the latest in a series of events which continue to have an impact on other operators in the sector. Air France, Iberia, Lufthansa, Tyrolean and British Airways have also already announced drastic cuts in commission. In order not to lose their livelihood completely, agencies are now obliged to pass on considerable additional costs when issuing tickets. It should be emphasised that it is first and foremost consumers who suffer the consequences of this situation, both as regards price increases and the risk that, in the long term, many agencies will be obliged to close down and thus an extremely important intermediary service will come to an end. Agencies do not only issue tickets but provide advice about timetables, the best fares and connections, inform passengers about strikes or flight cancellations, make arrangements for refund applications, book special services for people with disabilities and unaccompanied minors, and accept various methods of payment. Consumers are not always able to do these things themselves by contacting the airlines in person.

It is a serious problem that airlines, in order to justify the cuts, claim that they need to cope with competition from low-cost airlines and their marketing policies. It is no secret that these airlines target different customers, do not provide the same quality of service and do not offer the end user the same reliability, convenient scheduling, and the certainty of protection in the event of problems. In contrast, the scheduled airlines do not reduce the privileges for frequent travellers, such as discounts, ‘airmiles’, free stopovers and other incentives.

In view of all this and the fact that the European market is based on the rules of free competition and the Union has also undertaken to protect workers and consumers, can the Commission say:

1. whether the EU can intervene in this area;

2. whether it can offer guidance on the issue of competition between scheduled airlines and ‘low-cost’ airlines;

3 whether there are any examples of good practice and/or codes of self-regulation for airlines which may be used as a model?

Joint answer

to Written Questions E-0350/04 and E-0351/04

given by Mrs de Palacio on behalf of the Commission

(23 March 2004)

The Commission is aware of several decisions by European airlines, in particular Alitalia, to modify their system of paying commission to travel agencies. It understands that this is a matter of paramount importance for travel agencies and that they are concerned about the impact these changes may have on profitability and employment.

However, it should be stressed that the organisation of airlines' ticket sales is a matter which concerns the commercial freedom of each company, subject to the general rules that apply (contract and competition law, the single market, etc.). The Commission does not have any particular power beyond these general rules. It is also not aware of any code of good practice and/or self-regulation in this respect. There is one example of voluntary commitments given by airlines, but this only concerns passengers' rights (1).

Furthermore, as indicated in the question, travel agencies provide a whole range of services other than simply issuing tickets and handle a very large proportion of the ticket sales of conventional airlines. It must therefore be in the airlines' interest for this sales channel to continue to exist.

As far as the low-cost airlines are concerned, they sell practically all their tickets directly, mainly via the Internet, and as a result the conventional airlines, including Alitalia, have boosted their direct sales. However a large proportion of the low-cost airlines' customers are new and are people who did not normally travel by air in the past. The low-cost companies' market share is currently about 12 % of flights within the Union.

(1) http://www.ecac-ceac.org