WRITTEN QUESTION E-0874/02

by Jonas Sjöstedt (GUE/NGL) to the Commission

(2 April 2002)

Subject: International Air Transport Association (IATA)

The Commission has conducted a study of airlines' cooperation on fares and routes within the trade association IATA. IATA's general exemption should have expired in June 2001, though the Commission was reportedly prepared to extend it for a further year. However, the Commission was also to study whether there are other, better ways of airlines cooperating to enable passengers to find cheap and flexible fares.

What was the outcome of the Commission's study? Does the Commission not consider that IATA reduces competition and therefore the opportunities for consumers to enjoy cheap and good quality air travel? Can IATA continue to exist with, in principle, a permanent exemption?

Answer given by Mr Monti on behalf of the Commission

(27 May 2002)

As follows implicitly from the mere existence of the group exemption for International Air Transport Association (IATA) passenger tariff conferences the Commission considers that these conferences, which involve price fixing, are in principle restrictive of competition. The group exemption applies under certain additional conditions and obligations only. In particular, the discussions must be limited to fares that can be used on the services of several different carriers (so-called interlinable fares) and may not cover any fares that airlines set for their own services (so-called on-line fares).

In February 2001 the Directorate General Competition issued a Consultation Paper to seek views on, in essence, whether the benefits secured by the tariff consultations (that is the ability for passengers to interline) could be secured by less restrictive means. Responses were received from Member States, airlines, travel agents and consumer groups.

The vast majority of the respondents held the view that the IATA passenger tariff conferences secure an important benefit in the form of multilateral interlining and that this benefit was unlikely to be replicated by any alternative, less restrictive system. While most respondents acknowledged that withdrawing the block exemption for the passenger tariff conferences would not mean the end of interlining altogether, many felt that without the tariff conferences, consumers would have a smaller choice of flexible fares and smaller airlines might have fewer interlining opportunities and as a result find it harder to compete. However, some respondents argued that, as alliances develop, at least in the longer-term alliance or bilateral products might offer similar benefits to the benefits of IATA interlining.

In view of these responses the Commission proposes to extend the block exemption for passenger tariff conferences for three years, until 30 June 2005, under the further obligation that air carriers participating in conferences collect certain data on the relative use of the passenger tariffs set in the conferences and their relative importance for actual interlining. This Commission proposal was published on 13 April 2002 in the Official Journal(1) and third parties are invited to submit their comments within one month.

(1) OJ C 89, 13.4.2002.