Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 2299/89 on a code of conduct for computerized reservation systems
Date: 1993-01-12
Institutions: European Commission
Subjects: air transport, code of conduct, consumer protection, free competition, information system, ticket

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

C0M(92) 404 final 

Brussels, 23 September  1992 

Proposal  for a 

COUNCIL REGULATION (EEC) 

amending Regulation (EEC) No 2299/89 on a code of conduct for 

computerized  reservation systems 

(presented by the Commission) 

-  2 -

REPORT ON THE APPLICATION OF COUNCIL REGULATION  (EEC) 

NO 2299/89 ON A CODE OF CONDUCT  FOR COMPUTERIZED 

RESERVATION SYSTEMS  (CRSs) AND PROPOSALS FOR 

AMENDMENTS TO THE CODE 

Contents: 

I. 

Introduct ion 

II. 

Application of  the code of  conduct 

1. Waivers granted  to CRSs 

2. The Explanatory  Note 

3. Complaints and requests for  interpretation 

III.  Worldwide aspects of CRS regulation 

IV.  Needs for an amendment of  the code of conduct 

1. Clarifications/modifications of existing  rules 

2.  Inclusion of non-scheduled  services 

3. Mandatory  participation  in CRSs 

4. Dehosting or specific safeguards 

V. 

Comments on  Individual  Articles 

Annex  Proposal  for  amendments 

-  3 -

Report  on  the Application of Council  Regulation  (EEC) 

No 2299/89 on a Code of Conduct  for Computerized 

Reservation  Systems  (CRSs) 

I.  Introduction 

Reservation systems have  for  a  long time been used  in aviation as a 

normal  element  in air  carriers'  day-to-day  operations.  It was  in 

the  United  States,  however,  that  carriers  first  developed  modern, 

sophisticated  CRSs  to  cope  with  the  needs  and  quickly  changing 

conditions  of  a  free  market  and  to  hold  or  enlarge  their 

competitive market  positions. 

Because  of  their  extensive  capabilities  these  CRSs  became  very 

powerful  marketing  tools  for  their  owner  carriers  allowing  them  to 

achieve  advantages  to  the  detriment  of  their  competitors. 

Discrimination  occurred  in  the  way  flights  were  ranked  in 

displays, but also,  inter  alia. with  respect  to access  to marketing 

information generated  by  the CRS or  by preventing  subscribers  from 

switching  to or using  a competing CRS. 

Air  carriers which  did  not  have  their  own  CRS  came  to  depend  to a 

wide  extent  on  the  CRSs  of  their  competitors  for  the  distribution 

and  selling  of  their  own  products  which  encouraged  tendencies  to 

distortion of competition and abuse of dominant  positions. 

The  need  for  a  regulatory  framework  in  the  field  of  CRSs  became 

obvious  in order  to avoid  such  abuse and  to ensure  fair competition 

between  air  carriers  and  CRSs  to  the  benefit  of  both  the  industry 

and  the consumer. 

-  4 -

The Council  adopted  Regulation  No 2299/89 on  a code of  conduct  for 

computerized  reservation  systems  on  24 July  1989.  The  Regulation 

was published  in the Official  Journal  No L 220 on  29 July  1989 and 

came  into force on  1 August  1989.  The code stipulates  i.e. that  it 

has  to  be  reviewed  in  1992  for  which  purpose  the  Commission  shall 

present  a  report  on  the  application  of  the  code. 

The  report  is 

contained  in  section  II.  At  the  same  time  the  Commission  finds 

that  the  code  is  in  need  of  some  modifications. 

The 

Justifications  for  the  proposed  modifications are  found  in section 

IV and V and  the proposal  in  its entirety  in the Annex. 

The proposals  have been developed  after  thorough  consultations with 

Member  States, ECAC, air  carriers, consumers and  travel  agents. 

II. Application of  the code of  conduct 

1.  Waivers granted  to CRSs 

The  code  of  conduct  prescribed  for  the  first  time  as  a  legal 

obligation  a single default  algorithm  for  ranking  flights  in a 

principal  display. 

However, when  the code entered  into force, 

no  CRS  operating  in  the  Community  was  able  to  immediately 

fulfil  the  requirements  set  by  the  code. 

For  this  reason, 

Article  21(2)  constituted  a  waiver  of  the  application  of 

Articles 5(3)  and  9(5)  concerning  the  principal  display  until 

1 January  1990  in order  to give  system  vendors  the  opportunity 

to adapt  their  CRSs. 

If for  technical  reasons compliance  with 

the  code  was  not  possible  by  this  date  a  further  12 months' 

waiver might  be granted. 

-  5 -

All  CRSs  operating  at  that  time  in  the  Community  -  Amadeus, 

Galileo,  Sabre,  Datas  II  (later  on  merged  with  Pars  into 

Worldspan),  GETS  -  asked  the  Commission  by  the  end  of  1989  for  a 

waiver  beyond  1 January  1990  the  length of  which  differed  from  CRS 

to  CRS.  The  waivers  were  formally  granted  by  the  Commission's 

decision of  12 July  1990 to: 

Amadeus until  31 December  1990; 

Galileo  until  1 September  1990,  extended  by  Commission's 

decision of  29 November  1990 until  31 December  1990; 

GETS until  31 December  1990; 

Datas  II until  30 June 1990. 

Sabre,  for  which  American  Airlines  had  asked  as  a precaution  for a 

waiver  until  the  second  quarter  of  1990,  did  not  need  any  waiver 

beyond  1 January  1990. 

2.  The  Explanatory  Note 

The  code  of  conduct  constituted  a  completely  new  area  of 

legislation,  without  prior  practical  experience,  to  which  the 

industry  had  to  adapt  itself.  As  experience  with  its  application 

accumulated  it  became  clear  that  there  were  some  difficulties. 

During  the  first  months  of  the  implementation  of  the  code  of 

conduct  queries  were  raised  on  how  to  apply  the  provisions  of  the 

code  in  practical  terms,  in  particular  with  respect  to  the 

programming  and operating of  the systems. 

For  this  reason,  the  Commission  published  an  Explanatory  Note  in 

the  Official  Journal^1),  clarifying  the  provisions  of  the  code  of 

conduct  in  particular  for  the  principal  display  and  the  ranking 

criteria.  While  leaving  to  each  system  vendor  the  freedom  to  find 

its  own  individual  solution  to  the  requirements  of  the  code,  the 

(1) OJ  No C 184, 25.7.1990, p. 2. 

-  6 -

Commission  reserved  to  itself  the  possibility  of  examining  any 

system  in  its  totality  to  assess  its  overall  compliance  with  the 

code  of  conduct.  As  the  Explanatory  Note  as  such  has  no  legal 

power  and  is therefore  not  binding  on  the  parties  addressed  by  the 

code,  its  clarifications  will  therefore  need  to  be  incorporated 

into  the  revised  code  of  conduct  to  the  extent  it  still  seems 

necessary  or  appropriate.  The  Explanatory  Note  will  therefore 

become  unnecessary  and  can  be  withdrawn  with  the  entering  into 

force of  the  revised  code of  conduct. 

3.  Complaints  and  requests  for  interpretation 

Since  the code of  conduct  entered  into  force on  1 August  1989 until 

the  first  8  months  of  1992  the  Commission  has  received 

28 complaints  or  requests  for  interpretation  including  3 cases 

where  the  Commission  was  informed  as  a  precaution,  but  where  the 

matter  itself  has  been  settled  directly  between  the  parties 

concerned  without  further  action  by  the  Commission. 

The  total 

number  includes  3  cases  raised  under  the  competition  rules,  but 

which  also affect  the code of  conduct. 

The  number  of  complaints  and  requests  for  help  per  year  has  been 

increasing  slowly  since  1989 as  follows: 

Complaints 

Requests  for  interpret. 

1989  (5 months) 

1990 

1991 

1992  (8 months) 

2 

7 

5 

4 

2 

4 

4 

All  cases so far  have been  admissible. 

-  7 

In  1989  and  1990  the  majority  of  cases  were  requests  for 

interpretation  on  how  to  apply  the  provisions  of  the  code  of 

conduct. 

Since  1991  complaints  dominate,  due  to  the  increasing 

experience  with  the application of  the code of  conduct. 

The  bulk  of  these  cases  (15) refers  to  the way  in which  information 

on  schedules  and  fares  is displayed. 

Whereas  these  questions were 

predominant  in  the  beginning,  more  and  more  other  subjects  are  now 

addressed,  in  particular  questions  of  accessing  the  principal 

display,  of  fees  charged  to  participants,  be  they  carriers  or 

subscribers,  and  of  participation  of  carriers  in  different  CRSs. 

The  increasing  number  of  complaints  as  well  as  the  change  of 

subjects  with  their  increasing  complexity  indicate  the  tough 

competition  for  market  shares  between  air  carriers  and  system 

vendors. 

In  this  respect  questions  of  market  access,  i.e.  the 

possibility  of  CRSs  to  compete  on  a  fair,  non-discriminatory  basis 

in the  different  markets, gain  more  and  more  importance. 

Hitherto,  most  cases  could  be  solved  by  agreement  on  a  voluntary 

basis,  either  between  the  Commission  and  the  parties  concerned  or 

directly  between  the  parties,  with  or  without  intervention  of  the 

Commission. 

No  fines  have  been  imposed  so  far. 

Most  of  these 

cases  concerned  the display  of  information. 

There  are  still  10 complaints  and  requests  pending  which  are  more 

complex  and  therefore  need  more  time  for  investigation and  analysis 

or  have  been  submitted  to  the Commission  recently. 

More  detailed  information  on  the  complaints  is  given  in  the 

fol rowing  paragraphs. 

Three  complaints  concerned  the  display  of  joint  venture  flights 

which  could  lead  to  screen  padding  by  including  the  same  flight 

more  than  once  in  the  principal  display. 

The  result  was  that  a 

competing  flight  was  only  shown  on  the  next  page  of  the  display 

thereby  suffering  a  disadvantage  since  most  bookings  are  made  from 

-  8  -

the  first  page  of  the  principal  display. 

The  complaint  was 

resolved  in making  a distinction  between  the  types  of  joint  venture 

allowing  each  airline  to  display  individually  where  they  were 

individually  responsible  for  the  sale  of  a  portion  of  the  seats 

i.e.  a  blocked  space  arrangement. 

The  practices  were  modified 

accordingly. 

A similar  problem  concerning  code  sharing  was  resolved  by making  it 

clear  that  one  specific  flight  can  only  be  shown  once  and  not  for 

each  separate  flight  code. 

A  complaint  concerned  the  fact  that  a  reservation  system  allowed 

the  inclusion  of  air  fares  not  yet  approved  by  the  authorities  for 

its  parent  carrier  but  not  similar  fares  for  other  air  carriers. 

This  practice  was  stopped. 

Such  fares  may  be  included  with  an 

appropriate  annotation  but  it  has  to be without  discrimination. 

It  was  also  made  clear  following  a  complaint  that  all  air  fares 

provided  by  an  air  carrier  must  be  shown  by  a  CRS. 

It  is  not 

possible  to  limit  the  display  of  fares  to  only  these  which  have 

been  coordinated  in  IATA. 

Two  complaints  concerned  the  possibility  for  "direct  access"  to air 

carriers' own  inventories. 

In the  case  raised  it was  easier  to  do 

this  operation  for  the  parent  carrier  than  for  other  participating 

air  carriers. 

It  was  made  clear  that  such  discrimination  is not 

poss i bIe. 

The  procedures were  changed. 

Three  complaints  concerned  abuse  of  dominant  position  mainly  in 

respect  of  particpation  or  non-participation  in  competing  CRSs. 

The  complaints  are  treated  under  Article  86. 

One  complaint  concerns  the  pricing  policy  of  CRSs  in  particular  in 

respect  of  providing  free  hardware  to  subscribers  depending  on  a 

certain  number  of  bookings. 

This  complaint 

is  still  under 

examinât ion. 

- 9 -

Recently  two  complaints  have  been  received.  One  concerns 

discrimination between a parent carrier and other participating 

air carriers both within and outside the Community.  The other 

concerns  the  inclusion  of  certain  air  fares.  They  are both 

under examination. 

III. 

Worldwide aspects of CRS regulation 

The more air transport  is liberalized throughout the world, the 

more CRSs tend to go beyond  the  limits of  the current markets 

and to operate on a worldwide basis.  The  interest of States in 

introducing  their  own  CRS  regulation  is  increasing. 

But 

national  or  regional  regulations, although  helpful, will  not 

solve the problems  in connection with worldwide operating CRSs, 

because  these  regulations  differ  in many  and  also  important 

aspects. 

The  need  for  global  cooperation  and  global 

regulations in the field of CRSs is evident. 

As  both  the  ECAC  and  the  EC  code  of  conduct  are  due  to be 

revised, ECAC and  the Commission  decided  to cooperate closely 

in  this matter  in order  to  develop  just  one  uniform  set  of 

rules for  application  in whole  Europe.  The discussions with 

ECAC have been  very  fruitful  and  there  are good  chances that 

the EC and ECAC will adopt similar texts. 

Since 1985 ICAO, the International Civil Aviation Organization, 

not only encouraged  its Member  States to develop their own CRS 

regulations,  but  it  also  established  its  own  worldwide 

recommendations for  the use of  CRSs.  This task  proved  to be 

very  difficult  because  of  the  different  and  often  divergent 

interests of its Member States.  The  Commission  and EC Member 

-  10 -

States  participated  actively  in  the  development  of  the  ICAO  code 

which  was  adopted  by  the  ICAO  Council  in  December  1991. 

This 

code,  although  it  does  not  prescribe  a  single  algorithm  for  the 

ranking of  flights, represents  an  important  step  forward  towards a 

general  code to be applied worldwide. 

It  is  to  be  hoped  that  most  ICAO  Member  States  will  follow  as  a 

minimum  this code of  conduct.  However, the  ICAO recommendations do 

not  go  far  enough  and  abuse  is  still  possible  even  if  these 

recommendations are repeated. 

This was pointed out  in a  letter  to 

ICAO. 

IV. Needs for an amendment  of  the code of  conduct 

This code constituted a completely  new  field of  legislation without 

prior  practical  experience  and  the  Council  therefore  envisaged  a 

revision  of  this  Regulation  by  31 December  1992.  This  revision 

should  take  into  account  the  experiences  with  the  application  of 

the code of conduct  as well  as new developments  in the CRS market. 

As  the  relatively  small,  yet  increasing  number  of  complaints  and 

requests  for  interpretation  has  shown,  the  code  of  conduct  has 

proved  in general  to  be  quite  efficient. 

Nevertheless  it  turned 

out  that  some  areas  need  amendments  and  further  clarifications. 

This  concerns  in  particular  certain  aspects  of  the  principal 

display  and  the  ranking  criteria. 

The  algorithm  itself, however, 

is not  disputed.  These  clarifications  will  also  serve  to  include 

the  provisions  of  the  Explanatory  Note  on  the  code  of  conduct  for 

CRSs(2>  into  the  new  Regulation  making  the  Explanatory  Note 

unnecessary. 

(2) 0J  No C 184, 25.7.1990, p. 2. 

- 11 

Furthermore,  three years of  experience  with  the code  as well  as the 

fast  technical  and  marketing  development  in  the  CRS  sector  have 

revealed  possible  weaknesses  of  the  current  code. 

Appropriate 

modifications  and  safeguards  against  new  forms  of  discrimination 

will  be  needed  in order  to keep  the  code  an  efficient  guarantor  of 

compet it ion. 

When  the  Council  limited  the  present  code  to  scheduled  air 

services,  the  Commission  was  invited  to  examine  in  detail  the 

situation  concerning  CRS  use  for  non-scheduled  services  and  to 

present  proposals. 

Since  then, the  third  package  has been  adopted 

by  the  Council  which  removes  most  of  the  distinction  between 

scheduled  and  non-scheduled  services. 

To  be  consistent  with  this 

policy  and  to  ensure  fair  competition  between  both  kinds  of  air 

transport  services,  it  therefore  seems  necessary  to  extend  the 

scope  of  the  code  of  conduct  to  non-scheduled  services.  This 

subject  has  also  extensively  been  discussed  within  ECAC,  in  close 

cooperation  with  the Commission. 

A  majority  within  ECAC  favours 

such  an  integration. 

One  main  question  which  has  come  up  is  the  possibility  for  owners 

of  a CRS  virtually  to  bar  market  entry  for  other  CRSs  by  refusing 

to  participate  and  so  preventing  information  on  their  flights 

becoming  available  through  rival  systems.  The  question  of 

obligatory  participation  has  therefore  been  raised  in  particular 

under  Article 86 of  the competition  rules. 

Another  type of  abuse  is possible where  the owner  of  a CRS  creates 

a  close  connection  between  its  own  inventory  (schedules  and  seat 

availability)  and  the  CRS  thereby  securing  certain  advantages 

concerning  the  availability  of  information.  The  question  of 

dehosting  has  therefore  come up as a means  to resolve  the problems. 

-  12  -

There  are  four  main  areas where  modifications  seem  necessary: 

1.  Clarifications/modifications of  existing  rules 

2.  Inclusion of  non-scheduled  services 

3.  Mandatory  participation  in CRSs 

4.  Dehosting  or  specific  safeguards 

1.  Clarifications/modifications of  existing  rules 

The  current  code  of  conduct  applies  to  CRSs  offered  for  use  and/or 

used  in  the  territory  of  the  Community,  of  which  the  services  are 

made  available  to  subscribers. 

But  this  formula  and  the 

definition  of  a  subscriber  did  not  make  it  clear  whether  corporate 

users  and  airline  offices  were  included  in  the  scope  of  the  code. 

The  proposed  modifications will  make  it clear  that  the  code  applies 

to  corporate  users  and  airline  offices  in  general  (Article  2.k). 

However,  the  use  of  CRSs  in  airline  offices,  clearly  identified  as 

such, will  be  exempted  from  the  provisions  concerning  the  principal 

display  and  the  ranking  criteria,  whereas  all  other  provisions 

apply  (Article 20a). 

Clarification  is  also  necessary  with  respect  to  loading  of  data 

into a CRS  and  marketing  information. 

System  vendors  will  only  be 

able  to  fulfil  the  requirements  of  the  code  with  respect  to  the 

display  and  ranking  of  data  if  the  data  submitted  to  the  CRS  for 

their  part  fulfil  the  requirements  as  set  out  in  Article 4(1). 

The  responsibility  of  a  participating  carrier  for  the  quality  of 

data  it  provides  to  a  CRS  has  therefore  been  strengthened  (Article 

4.1). 

Furthermore,  intermediaries  will  now  be  required  not  to 

manipulate  data  which  are  submitted  via  them  in  such  a  way  that 

erroneous  information  is provided  (Article 4.1). 

Taking 

into  account 

the 

importance  that  access  to  market 

information 

has 

for 

the 

competition 

between 

carriers, 

a 

modification  to  the  code  of  conduct  will  ensure  that  information 

generated  by  a  CRS,  when  made  available,  is  offered  to  all 

participating  carriers  at  the  same  time  (Article 6 ). 

-  13  -

The  provision  of  a  neutral,  unbiased  principal  display,  in 

particular  as  regards  the  order  in which  information  is  presented, 

constitutes  the  key  element  of  the  code  of  conduct. 

A  number  of 

questions  as  to  the  meaning  of  the  present  code  have  been  raised 

and  dealt  with  in  the  Explanatory  Note.  A  clear  understanding  of 

the  intentions  of  the  code  especially  in  this  area  is  essential. 

The  revised  code  of  conduct,  therefore  in Article  5  and  the  Annex: 

clarifies  that  the  principal  display  must  always  be  accessed 

first  except  where  a consumer  requests  information  for  only  one 

air  carrier; 

clarifies  and  strengthens  the  ranking  criteria,  especially  with 

respect  to code-sharing  and/or  joint  venture  flights; 

introduces  specific  provisions  for  the  display  of  information 

on  fares. 

The  current  code  of  conduct  allows  a  participating  carrier  or  a 

subscriber  to  terminate  its  contract  with  a  system  vendor  without 

penalty  after  a certain  period.  This  provision  had  been  included  in 

order  to  avoid  "liquidated  damages"  in  cases  where  a  contract  is 

terminated  prematurely,  because  this  can  unfairly  prevent  a  carrier 

or  subscriber  from  changing  CRSs. 

It  has  turned  out,  however,  that  in  cases  of  termination  a  system 

vendor  may  be  left  with  costs  which  are  not  directly  linked  to  the 

use  of  the  system  by  a  subscriber  for  which  there  may  exist  long-

term  contracts  with  a  third  party,  e.g.  for  hardware. 

Since  the 

code  stipulates  that  hardware  may  be  used  with  any  CRS,  subject  to 

compatibility,  and  in  order  to  allow  a  system  vendor  to  recover 

these  costs  and  in  order  to  increase  competition  in  the  field  of 

third  party  hardware,  a  separation  of  contracts  for  the  use  of  a 

CRS  and  the  supply  of  the  technical  equipment  seems  appropriate. 

The  latter  will  be  dealt  under  normal  contract  law,  unless  the 

contract  contains  conditions  which  directly  or  indirectly  would 

-  14 

prevent 

a  subscriber 

from  changing 

systems. 

Recovery  of 

liquidated  damages,  however,  remains  prohibited  and  the  contracts 

may  not  be  set  up  in such  a way  that  they  prevent  a subscriber  from 

changing  systems  (Article 9.4). 

The  current  code  of  conduct  allows  the  use of  third-party  equipment 

if  it  is compatible  with  the  system. 

However,  the  increasing  use 

of  intelligent  PCs  instead  of  dumb  terminals  encourages  the  use  of 

third-party  software. 

Provisions  have  therefore  been  proposed  to 

also  allow  for  third-party  software  provided  it  is  compatible 

(Article 9.6). 

The  use  of  intelligent  PCs  and  third-party  software  makes  it 

increasingly  unmanageable  for  system  vendors  to  fulfil  their 

obligation  under  the  code  to  ensure  that  a  subscriber  does  not 

manipulate  material  supplied  by  CRSs. 

The  revised  code of  conduct 

respects  this  development  by  limiting  this  obligation  to  a 

contractual  provision  only  (Article 9.5). 

Another  matter  of  constant  concern  to  air  carriers  is  billing 

practices  by  system  vendors  providing  inaccurate,  incomplete  and 

unclear  invoices. 

In  order  to  ensure  minimum  standards  for 

billing,  a  new  provision  has  been  included  in  the  code  of  conduct 

(Article  10.2). 

A more  detailed  catalogue  of  requirements  did  not 

seem  appropriate  as  the wishes  of  individual  participating  carriers 

vary  widely  in this  respect. 

Although  modern  CRSs  more  and  more  are  offered  and  used  in  all 

parts  of  the  world,  the  rules  under  which  these  CRSs  operate  may 

vary  considerably  between  different  countries. 

As  long  as  there 

is no uniform  worldwide  code  of  conduct  for  CRSs,  the  provisions  on 

reciprocity  remain  a  necessary  and  important  means  for  system 

vendors  and  participating  carriers  to  strive  for  equivalent 

-  15 -

treatment  elsewhere  in the world  to  that  provided  under  the code of 

conduct. 

The  proposed  amendments  to  the  code  will  make  it  clear 

that 

reciprocity 

rules 

will 

apply 

regardless 

of 

where 

discrimination  exists  outside  the  territory  of  the  Community 

(Article 7.1  and 2 ). 

2.  Inclusion of  non-scheduled  services 

The  majority  of  air  transport  passengers  in  the  Community  is 

travelling  on  non-scheduled  services. 

However,  air  transport 

products  offered  on  these  services,  both  as  package  tours  or 

"bundled  products"  where  air  transport  only  forms  one  element  of 

the whole  product,  and  "seat-only" or  "unbundled  products" sold  via 

intermediaries  to  the  public  and  distributed  through  CRSs  other 

than  in-house  systems  of  air  carriers  and  tour  operators,  are  not 

covered  by  the  regulation.  The  scheduled  and  non-scheduled  air 

carriers  have  increasingly  been  competing  directly  in each  others' 

markets,  in  particular  with  respect  to  unbundled  products. 

In 

order  to ensure  fair  competition  both  kinds of  air  transport  should 

be  treated  equally.  Consequently,  the  third  liberalization  package 

integrates scheduled  and  non-scheduled  services. 

Equal  treatment  would  also  mean  to  give  non-scheduled  air  carriers 

the  possibility  to  distribute  their  products  via  the  same  channels 

and  in  the  same  way  as  those  of  scheduled  air  carriers,  providing 

neutral,  non-misleading  information  to  the  consumer. 

How  best  to 

incorporate  this sector  in the  code of  conduct, bearing  in mind  the 

different  nature of  unbundled  and  bundled  products, has  extensively 

been  discussed  in  close  cooperation  with  ECAC,  air  carriers, 

consumers  and Member  States. 

The  solution  which  serves  consumer  interests  best  and  ensures  non 

discrimination  between  both  kinds  of  air  transport  seems  to  be  to 

include  non-scheduled  services  in  the  scope  of  the  code  of  conduct 

and  to 

integrate  unbundled  products 

in  the  same  display 

-  16  -

irrespective  of  whether  they  are  offered  on  scheduled  or  non-

scheduled  services  (Articles  1,  2  and  the  Annex). 

However,  full 

inclusion  in  the  principal  display  of  bundled  products,  apart  from 

the  actual  flights,  would  severely  limit  the  transparency  of  such 

displays.  The  detailed  information  on  bundled  products  will 

therefore  be  displayed  on  secondary  displays  (Article  5.4).  The 

general  principles  and  rules  of  the  code,  however,  will  also  apply 

to bundled  products  (Article 1 ). 

The  proposed  amendments  will  ensure  non-discriminatory  distribution 

of  information on  unbundled  products on  scheduled  and  non-scheduled 

services. 

Nevertheless,  in order  to make  clear  that  the  products 

are  basically  the  same,  but  not  identical,  non-scheduled  services 

have  to  be  clearly  identified  in  the  interest  of  the  consumer. 

For  the  same  reason,  the  consumer  shall  also  be  afforded  the 

possibility  of  having, on  request,  the  principal  display  limited  to 

scheduled  air  services  (Article  5.2b). 

3.  Mandatory  participation  in CRSs 

When  introducing  the  code  of  conduct,  one  of  the  objectives  was  to 

ensure  fair  competition  between  CRSs. 

There  is  no  doubt  that 

non-participation  of  an  air  carrier,  in  particular  when  it  is 

dominant  in  a  market,  can  seriously  disadvantage  a  CRS  and  thus 

distort  competition  between  CRSs. 

On  the other  hand,  it has  also 

to  be  taken  into  account  that  mandatory  participation  in  all  CRSs 

at  the  highest  level  of  functionality  would  seriously  affect 

competition  between  air  carriers,  weaken  their  negotiating  power 

towards  system  vendors  and  hinder  the  incentives  to  further 

enhancements  as  well  as  introducing  a  substantial  cost  element 

which  would  in  particular  damage  small  and  medium-sized  air 

carriers. 

Furthermore,  as  long  as  Community  air  carriers  and 

CRSs  are  not  given  the  same  treatment  and  possibilities  in  third 

countries  as  carriers/CRSs  of  these  countries  enjoy  in  the 

Community,  a  full  participation  at  the  highest 

level  will 

disadvantage  Community  air  carriers  and  CRSs. 

-  17  -

It  is  possible  to  deal  with  this  problem  either  under  the 

competition  rules  or  in  the  code  of  conduct.  The  latter  approach, 

however,  would  seem  to  have  the  advantage  that  the  code  of  conduct 

applies  to  all  CRSs  used  and/or  offered  for  use  in  the  Community, 

be  they  single  or  multi-owned,  whereas  an  amendment  to  the  group 

exemptions  concerning  agreements  between  undertakings  relating  to 

CRSs  would  only  apply  to  multi-owned  CRSs  although  naturally 

Article  86  applies  to single-owned  systems. 

The  revised  code  of  conduct  aims  to  establish  a  balance  between 

the  different  interests  concerned. 

The  relevant  provision  in 

Article  3a  is  restricted  to  parent  carriers  and  their  affiliates. 

It will  require  such  an  air  carrier  to  provide  to  a  competing  CRS, 

on  request,  the  same 

information  on  schedules,  fares  and 

availability  on  its  services  as  it  provides  to  its  own  CRS  and  to 

accept  bookings  on  its  flights  from  these  other  CRSs. 

As 

participation  in other  systems  may  impose  a  severe  economic  burden 

on  small  and  medium-sized  carriers  the  costs  which  they  may  be 

required  to pay  have  been  limited  to  the  costs  for  the  reproduction 

of  the  information  to  be  provided  and  the  booking  fees. 

In  this 

way  it  will  be  ensured  that  the  economic  viability  of  small 

carriers  is not  endangered. 

Dehosting  or  specific  safeguards 

An  issue of  major  concern  to  air  carriers  is the  possibility  for  a 

parent  carrier  to  obtain  competitive  advantages  by  virtue  of  the 

fact  that  its  internal  reservation  system  is  not  separated  from 

the  externally  marketed  CRS.  It  is  claimed  that  dehosting  is  a 

prerequisite  for  equal,  non-discriminatory  treatment  of  parent  and 

participating  carriers  in  CRSs  and  for  undistorted  competition 

between  air  carriers.  Dehosting  means  that  the  CRS  functions  must 

be  separated  from  the  internal  reservation  and  inventory  functions 

of  air  carriers. 

-  18 -

Some  existing  CRSs  are  dehosted. 

In  cases  where  the  publicly 

marketed  CRS  also  serves  as  the  parent  carriers's  internal 

reservation  system  it  may  enjoy  advantages  in  respect  of  real-time 

up-dating  of  schedules,  last  seat  availability  and  up-to-date 

information 

on 

fares, 

whereas 

the 

same 

information 

for 

participating  carriers  will  depend  on  the  telecommunication  links 

established  and  the  loading  methods  available  and  selected. 

This 

gain  of  time  for  a  parent  carrier  of  a  non-dehosted  CRS  and  the 

higher  reliability  of  its  data  in  that  CRS  may  be  a  decisive 

competitive  advantage. 

Furthermore,  CRSs  generate  a  lot  of  marketing  information  on 

bookings,  routes,  markets,  etc.  which  are  essential  for  the 

business  policy  of  an  air  carrier. 

A  parent  carrier  of  a  non-

dehosted  CRS  may  have  more  or  less  unrestricted,  at  least  quicker 

access  to  this  marketing  information  than  participating  carriers. 

The  competitive  advantage  of  this  is evident. 

For  these  reasons  dehosting  is  put  forward  as  a  solution  to  this 

problem. 

On  the other  hand: 

(a)  It  is doubtful  whether  dehosting  in  itself  will  eliminate  bias 

of  a  CRS  in  favour  of  the  hosted  carrier.  The  internal  and 

external  functions  will  still  be  close  and  the  control  of  the 

CRS  remains  in the  same  hands. 

(b) Mandatory  dehosting  may  also  cause  political  difficulties  with 

third  countries. 

This  may,  in  return,  have  repercussions  on 

the  treatment  of  Community  air  carriers  to  their  disadvantage 

in  these  countries.  As  long  as  dehosting  is not  a  requirement 

on  a  worldwide  basis  such  action  has  to  be  considered 

carefully. 

-  19 -

The  proposed  modifications  in  Articles  4.4  and  6  of  the  code 

therefore  do  not  include  dehosting  but  concentrates  on getting  the 

underlying  principles  right.  Provisions  are  introduced  which  will 

ensure equal  treatment  by establishing  "Chinese walls" by  technical 

means  and  appropriate  software  safeguards  between  the  internal 

reservation  system  and  the  CRS  and  by  prohibiting  the  parent 

carrier  from  reserving  any  specific  loading  and  up-dating  method 

for  itself. 

V.  Comments on  individual  Articles 

Art icle 1 

Editorial  changes 

Art icle 2 (a. b and  c) 

New  definitions  in  order  to  include  non-scheduled  services  with 

both unbundled  and bundled  air  transport  products. 

Article  2 (d. formerly  I) 

Editorial  change  to  ensure  consistency  of  the  terminology  of  the 

code. 

Art icle 2  (e) 

New  definition  because  of  the  inclusion  of  non-scheduled  air 

services. 

Article  2 (g. formerly  c) 

Clarification. 

The  code only  applies  to CRSs whose  services  are 

made available  to subscribers. 

Article 2 (J. formerly  f) 

Clarification  to ensure equal  treatment of  parent  and participating 

carriers with  respect  to access  to marketing  information. 

Article  2 (k. formerly  g) 

Amendment  to make  it clear  that  corporate users are  included. 

-  20  -

Article  2  (m.  formerly  i) 

Clar if icat ion. 

Article  2  (o.  formerly  k) 

Editorial  change  for  consistency  with  the  terminology  of  the  code. 

Article  3(1) 

Clarification. 

Article  3(2c) 

Modification  to  make  it  clear  that  system  vendors  are  only  allowed 

to  recover  their  direct  costs  in  cases  of  a  normal  contract 

termination  (in  accordance  with  this  paragraph). 

Art icle  3a 

Introduction  of  an  obligation  on  parent  carriers  and  their 

affiliates  not  to  discriminate  against  competing  CRSs  by  obliging 

them  to  provide  the  same  information  on  own  services  to  competing 

CRSs  as  to  their  own  CRS  and  with  equal  timeliness. 

This  Article 

should  be  read  in  conjunction  with  Article  8.3  for  the  question  of 

t icket ing. 

Art icle  4(1) 

Clarification  of  the  participating  carriers'  obligation  with 

respect  to  the  quality  of  data  provided  for  inclusion  in  a  CRS. 

Furthermore, 

the 

provision 

prevents 

intermediaries 

from 

manipulating  data  submitted  via  them  for  inclusion  in a CRS  so  that 

erroneous  information  results. 

Article  4(3) 

While  requiring  in  principle  a  system  vendor  to  load  and  process 

data  submitted  to  its  CRS  with  equal  care  and  timeliness,  it  is 

recognized  that  there  might  be  technical  constraints  which  will 

lead  to  different  treatment. 

This  will  be  allowed  as  long  as  the 

constraints  are  outside  the  control  of  a  system  vendor. 

-  21  -

Article  4(4) 

Inclusion  necessary  to  ensure  that  no  parent  carrier  enjoys 

competitive  advantages  over  its  competitors  with  respect  to  quicker 

and  more  reliable  loading  and  up-dating  of  data. 

This  provision 

should  be  read  in conjunction  with  paragraph  3.1. 

Art icle  5 

Reordered  and  partly  reworded  for  clarification. 

Article  5(2a) 

The  text  now  makes  it  clear  that  even  when  a  consumer  has 

introduced  certain  limitations  the  resulting  display  shall  still  be 

neutral,  in  other  words  it  is  still  to  be  treated,  to  the  extent 

possible,  as  a  principal  display. 

Article  5(3) 

Clarification 

to  ensure 

that 

the 

principles 

of 

accuracy, 

comprehensiveness,  etc.  also  apply  to  displays  of  air  fares. 

Article  5(4) 

To  clarify  that  the  principal  display  is  reserved  for  information 

on  flights  and  types  of  air  transport  products. 

Article  6(1)  and  (2) 

Reordered  and  with  editorial  changes  for  clarification. 

The 

modifications  in  Article  6  (1b)  will  ensure  that  no  parent  carrier 

can  reserve  any  information  from  its  CRS  for  itself  and  that  the 

information  has  to  be  offered  to  all  participating  carriers  with 

equal  timeliness,  but  recognizing  that  participating  carriers  may 

choose  different  transmission  methods. 

Article  6(3) 

Inclusion  necessary  to  ensure  that  only  carriers  or  persons,  who 

are  entitled  by  the  provisions  in  paragraphs  1  and  2,  have  access 

to  the  data  and  in  particular  that  no  parent  carrier  has 

unauthorized  access  to  information  generated  by  its CRS. 

-  22 -

Article 7(1) and  (2) 

Editorial  adaptations  because  of  modifications  elsewhere  in  the 

code  of  conduct.  The  amendments  will  also  clarify  that  Community 

air  carriers  and/or  system  vendor  will  have  the  right  to  deviate 

from  the  obligations  under  the  code  of  conduct  if  they  are 

discriminated  against  and not  accorded  equivalent  treatment  to that 

provided  under  the  code  outside  the  territory  of  the  Community, 

regardless  where. 

Within  the  Community  the  code  applies  and 

compliance  with  its provisions  can be assured  by  the procedures set 

out  in Articles  11  to 20. 

Article  8(1) and  (2) 

Clar ificat ion. 

Article  8(3) 

Clar i f icat ion. 

Article  9(4) 

The  new  wording  of  this  paragraph  allows  for  a  separation  of 

contracts  for  the  use  of  a  CRS  on  one  side  and  the  supply  of 

technical  equipment  on  the other  side,  the  latter  being  subject  to 

normal  contract  law.  The  provision  will  also  limit  a  system 

vendor  to recover  only  direct  costs  related  to a normal  termination 

of  the contract  (according  to this paragraph) for use of a CRS, but 

no  liquidated damages. 

Article  9(5) 

Reordered  and  modified  for  clarification. 

The  obligation  on 

system  vendors  to  ensure  that  subscribers  do  not  manipulate  data 

supplied  by  CRSs  has  been  mitigated  because  its  enforcement  does 

not  seem  possible  any  longer  with  the  use  of  intelligent  PCs  and 

the permission  of  third-party  software  in travel  agencies. 

Article  9(6) 

Modification  to allow  for  third-party  software. 

-  23 -

Article  10(1) 

Modification  to  increase  transparency  of  the  fee  structure  so  that 

participating  carriers  may  only  use  and  pay  for  services  they 

real I y need. 

Article  10(2) 

Inclusion  to provide  for  basic billing  requirements. 

Art icle 20a 

This  provision  exempts  CRSs  used  in  airline  offices  and  sales 

counters, clearly  identified  as such, from  the requirements  for  the 

principal  display and  the ranking  criteria. 

Annex 

The  Annex  has  been  reordered  for  clarification  and  modified,  where 

necessary,  in order  to  include non-scheduled  services. 

In the heading 

it  is  already  made  clear,  that  the  Annex  only  applies  to  flights 

offering  unbundled  products,  both  on  scheduled  and  non-scheduled 

services. 

Paragraph  2 

Editorial  changes 

Paragraph  3 

Clar if icat ion. 

Paragraph  4 

The  provisions  of  this  paragraph  have  to  be  read  in  conjunction  with 

paragraph  3. 

Paragraph  5 

Inclusion necessary  for  transparency  in the  interest of  the consumer  to 

distinguish  between  scheduled  and  non-scheduled  services  in  the 

principal  display. 

-  24 -

Paragraph  7 

Inclusion  necessary  for  transparency  in the  interest  of  the consumer. 

Paragraph  8 

Modifications necessary  to avoid  that  the same air  service  appears more 

than once  in a display. 

Paragraph  9 

This  provision  covers  mainly  scheduled  services  but  the  second  part 

will  also, as appropriate, apply  to non-scheduled  services. 

Paragraph  10 

Clarification  and  strenghtening of  the existing  requirement. 

-  25 -

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

amending  Regulation  (EEC) No 2299/89 on a code of  conduct  for 

computerized  reservation  systems 

THE COUNCIL OF THE  EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 

Community,  and  in particular  Article 84(2) thereof, 

Having  regard  to the proposal  from  the  Commission^1), 

Having  regard  to the opinion of  the European  Par Iiament^2), 

Having  regard  to the opinion of  the Economic  and  Social  Committee^3), 

Whereas  Council  Regulation  (EEC)  No  2299/89( 4)  constitutes  a 

significant  step  in  respect  of  undistorted  competition  between  air 

carriers  and  between  computer  reservation  systems,  thereby  protecting 

the  interests of  consumers; 

Whereas  it  is  necessary  to  extend  the  scope  of  Regulation  (EEC) 

No 2299/89  and  to clarify  its provisions  and  it  is appropriate  to  take 

these measures  at  Community  level  to ensure  that  the objectives  of  the 

Regulation  are met  in all  Member  States; 

Whereas  this  Regulation  is  without  prejudice  to  the  application  of 

Articles 85 and 86 of  the Treaty; 

(1) 

(2) 

(3) 

(4) OJ  No L 220, 29.7.1989, p. 1 

-  26 -

Whereas  Commission  Regulation  (EEC)  No  83/91( 5 ),  as  amended  by 

Regulation  (EEC) No  3618/92(6>,  exempts  from  the  provisions  of  Article 

85(1) of  the Treaty  agreements  for  the common  purchase, development  and 

operation of  computer  reservation systems; 

Whereas  the  majority  of  air  transport  passengers  in  the  territory  of 

the Community  travels on non-scheduled  services; 

Whereas  the  bulk  of  these  journeys  are  package  tours  or  bundled 

products  with  air  transport  forming  only  one  element  of  the  whole 

product ; 

Whereas  "seat-only"  or  unbundled  products  on  non-scheduled  services 

compete  in  principle  directly  with  air  transport  products  offered  on 

scheduled  services; 

Whereas  it  is desirable  to  treat  same  products  equally  and  to  ensure 

fair  competition  between  both  kinds  of  air  transport  products  and  a 

neutral  dissemination of  information  to the consumer; 

Whereas  it  is appropriate  to  deal  with  all  matters  of  use  of  computer 

reservation  systems  for  all  kinds of  air  transport  products  in the same 

Council  Regulation; 

Whereas  it would  not  be appropriate  that  bundled  air  transport  products 

are  integrated  in the principal  display; 

Whereas  it  is  desirable  to  clarify  that  Regulation  (EEC)  No  2299/89 

should  apply  to computer  reservation  systems offered  and/or  used  in the 

territory  of  the  Community  (except  for  those  provisions  on  the 

principal  display  and  the  ranking  criteria  for  systems  used  by  an 

airline  in  its own  office  clearly  identified  as such) and  to all  final 

consumers, be they  individual  members of  the public or  corporate users; 

(5) OJ  No L 10, 15.1.1991, p. 9. 

(6) OJ  No L 367, 16.12.1992, p. 16. 

-  27 

Whereas  a clear  distinction  between  a contract  for  participation  in or 

allowing  for  use of  a system  and  the supply  of  the  technical  equipment 

itself  is appropriate, the  latter  being subject  to normal  contract  law, 

thus allowing  a system vendor  to claim at  least  his direct costs  in the 

case of  termination of  a contract  in accordance with  the  provisions of 

this Régulât ion; 

Whereas denial  on  the part of parent  carriers  to participate  in systems 

other  than  their own can seriously  distort  competition between  computer 

reservation systems and/or  air carriers-, 

Whereas  a  parent  carrier  may  enjoy  unfair  advantages  arising  from  its 

control  over  its computer  reservation system  in the competition between 

air  carriers;  whereas  therefore  total  equality  of  treatment  of  parent 

and  participating  carriers  is  necessary  to  the  extent  that  a  parent 

carrier uses the facilities of  its own  system; 

Whereas  it  is  desirable  in  the  consumer's  interest  that  a  principal 

display  shall  always  be  provided  for  each  transaction  requested  by  a 

consumer, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation  (EEC) No 2299/89  is hereby  amended  as  follows: 

1.  Articles  1, 2 and  3 are replaced  by  the  following: 

"Article 1 

This  Regulation  shall  apply  to  computerized  reservation  systems 

relating  to air  transport  products, when offered  for use and/or used  in 

the territory of  the Community  irrespective of: 

the status or  nationality of  the system vendor-, 

-  28 -

the  source of  the  information used  or  the  location of  the  relevant 

central  data processing unit-, 

the geographical  location of  the air  transport  product  concerned. 

Article  2 

For  the purposes of  this Regulation: 

(a)  'unbundled  air  transport  product'  means  the  carriage  by  air  of  a 

passenger  between  two  airports,  including  any  related  ancillary 

services and additional  benefits offered  for  sale and/or  sold as an 

integral  part of  that product; 

(b)  'bundled air  transport  product' means a pre-arranged  combination of 

an  unbundled  air  transport  product  with  other  services  not 

ancillary  to  air  transport,  offered  for  sale  and/or  sold  at  an 

inclusive pr ice-, 

(c)  'air  transport  product'  means  both  unbundled  and  bundled  air 

transport products; 

(d)  'scheduled  air  service' means  a  series  of  flights  each  possessing 

all  the following characteristics: 

it  is performed  by  aircraft  for  the  transport  of  passengers or 

passengers  and  cargo  and/or  mail  for  remuneration,  in  such  a 

manner  that  on  each  flight  seats  are  available  for  individual 

purchase  by  consumers  (either  directly  from  the  air  carrier  or 

from  its authorized  agents); 

-  29  -

it  is operated  so  as  to  serve  traffic  between  the  same  two  or 

more  points, either: 

1.  according  to a published  timetable-, or 

2.  with  flights  so  regular  or  frequent  that  they  constitute  a 

recognizably  systematic  series; 

(e)  'fare'  means  the  price  to  be  paid  for  unbundled  air  transport 

products  and  the conditions under  which  this  price  applies; 

(f)  'computerized  reservation  system'  (CRS) means  a computerized  system 

containing  information  about,  inter  alia,  air  carriers' 

-  schedules, 

-  availabiIity, 

-  fares, and 

-  related  services, 

with  or  without  facilities  through  which 

-  reservations  can  be made  or 

-  tickets may  be  issued, 

to  the extent  that  some or  all  of  these  services  are made  available 

to subscr ibers-, 

(g)  'distribution  facilities'  means  facilities  provided  by  a  system 

vendor  to  a  subscriber  for  the  provision  of  information  about  air 

carriers'  schedules,  availability,  fares  and  related  services  and 

for  making  reservations  and/or  issuing  tickets,  and  for  any  other 

related  services; 

-  30 -

(h)  'system  vendor'  means  any  entity  and  its  affiliates  which  are 

responsible  for  the operation  or marketing  of  a CRS; 

(i)  'parent  carrier' means  any  air  carrier  which  is a system  vendor  or 

which  directly  or  indirectly,  alone or  Jointly  with others, owns or 

controls a system  vendor, as well  as any  air  carrier which  is owned 

and/or  controlled  by  it; 

(J)  'participating carrier' means an air  carrier  which  has an agreement 

with  a system  vendor  for  the distribution  of  air  transport  products 

through  a  CRS.  To  the  extent  that  a  parent  carrier  uses  the 

distribution and/or  information  facilities of  its own  CRS,  it shall 

be considered  a participating  carrier; 

(k)  'subscriber'  means  a  person  or  an  undertaking,  other  than  a 

participating carrier, using  the  facilities of  a CRS under  contract 

or other  arrangement  with  a system  vendor; 

(I)  'consumer'  means  any  person  seeking  information  about  and/or 

intending  to purchase  an air  transport  product; 

(m)  'principal  display'  means  a  comprehensive  neutral  display  of  data 

concerning  air  services between  city-pairs, within  a specified  time 

per iod; 

(n)  'elapsed  journey  time' means  the  time  difference  between  scheduled 

departure  and  arrival  time; 

(o)  'service  enhancement'  means  any  product  or  service  offered  by  a 

system  vendor  on  its own  behalf  to subscribers  in conjunction  with 

a CRS other  than distribution  facilities. 

31  -

Article  3 

1.  A  system  vendor  shall  allow  any  air  carrier  the  opportunity  to 

participate,  on  an  equal  and  non-discriminatory  basis,  in  its 

distribution  facilities  within  the  available  capacity  of  the  system 

concerned  and  subject  to  any  technical  constraints  outside  the  control 

of  the system vendor. 

2.  (a) A system vendor  shall  not: 

attach  unreasonable  conditions  to  any  contract  with  a 

participating carrier; 

require  the  acceptance  of  supplementary  conditions  which, 

by  their  nature  or  according  to  commercial  usage,  have  no 

connection  with  participation  in  its  CRS  and  shall  apply 

the same conditions  for  the same  level of service. 

(b) A  system  vendor  shall  not  make  it a  condition  of  participation 

in  its  CRS  that  a  participating  carrier  may  not  at  the  same 

time be a participant  in another  system. 

(c) A  participating  carrier  may  terminate  its  contract  with  a 

system  vendor  on  giving  notice  which  need  not  exceed  six 

months, to expire no earlier  than  the end of  the  first  year. 

In such  a  case  a  system  vendor  may  not  be  entitled  to  recover 

more  than  the  costs  directly  related  to  the  termination  of  the 

contract. 

3.  Loading  and  processing  facilities  provided  by  the  system  vendor 

shall  be offered  to all  participating carriers without  discrimination. 

-  32 -

4.  If  the  system  vendor  adds  any  improvement  to  the  distribution 

facilities  provided  or  the  equipment  used  in  the  provision  of  the 

facilities,  it  shall  offer  these  improvements  to  all  participating 

carriers on  the same  terms and  conditions, subject  to current  technical 

I imitât ions." 

2.  The  following Article 3a  is  inserted: 

"Article  3a 

1.  (a) A  parent  carrier  may  not  discriminate  against  a  competing 

CRS  by  refusing  to  provide  to  a  competing  CRS  with  equal 

timeliness  the  same  information  on  schedules,  fares  and 

availability  relating  to  its  own  air  services  as  it 

provides  to  its  CRS  or  to  distribute  its  air  transport 

products  through  another  CRS  to  the  same  extent,  at  the 

same  level,  as  promptly  or  on  comparable  terms  as  through 

its  own  CRS,  or  by  refusing  to  accept  a  reservation  made 

through  a  competing  CRS  for  any  of  its  air  transport 

products which  are distributed  through  its own CRS. 

(b) The parent  carrier  shall  not  be obliged  to accept  any  costs 

in  this  connection  except  for  reproduction  of  the 

information  to be provided  and  for  the bookings  made. 

2.  Subject  to  the  procedure  set  out  in Article  7(3)  and  (4), the 

obligation  imposed  by  this  Article  shall  not  apply  in  favour  of  a 

competing  CRS  which  is  in  breach  of  Article 4(4)  or  whose  parent 

carriers  have access  to  information  in breach of Article  6." 

-  33 -

3.  Articles 4, 5 and 6 are replaced  by  the  following: 

"Article  4 

1.  Participating  carriers  and  others  providing  material  for  inclusion 

in  a  CRS  shall  ensure  that  the  data  submitted  are  comprehensive, 

accurate, non-misleading and  transparent,  inter  al8a. enabling  a system 

vendor  to meet  the  requirements  of  the  ranking  criteria  as  set  out  in 

the Annex. 

Data submitted  via  intermediaries shall  not  be manipulated  by  them  in a 

manner  that  would  lead  to  inaccurate,  misleading  or  discriminatory 

informat ion. 

2.  A  system  vendor  shall  not  manipulate  the  material  referred  to  in 

paragraph  1  in  a  manner  that  would  lead  to  inaccurate, misleading  or 

discriminatory  information  being  provided. 

3.  A  system  vendor  shall 

load  and  process  data  provided  by 

participating  carriers with  equal  care  and  timeliness  subject  only  to 

the  constraints  of  the  loading  method  selected  by  individual 

participating  carriers  and  to  the  standard  formats  used  by  the  said 

vendor. 

4.  A  parent  carrier  shall  not  reserve  any  specific  loading  and/or 

processing  procedure  for  itself. 

Article  5 

1.  (a) Displays by a CRS shall  be clear  and  non-discriminatory. 

(b) A  system  vendor  shall  not  intentionally  or  negligently  display 

in  its CRS  inaccurate or misleading  information. 

-  34  -

2.  (a) A  system  vendor  shall  provide  through  its  CRS  a  principal 

display  for  each  individual  transaction  and  shall  include 

therein  the  data  provided  by  participating  carriers  on  flight 

schedules,  fare  types  and  seat  availability  in  a  clear  and 

comprehensive  manner  and  without  discrimination  or  bias,  in 

particular  as  regards  the  order 

in  which  information  is 

presented  within  the  limits  specified  by  the  consumer  at  any 

one  time. 

(b) The  consumer  shall  be  afforded  the  possibility  of  having,  on 

request,  the  principal  display 

limited  to  scheduled  air 

services. 

(c)  In  constructing  and  selecting  city-pairs  for  inclusion  in  the 

principal  display  no  discrimination  on  the  basis  of  airports 

serving  the  same  city  shall  be  effected. 

(d) Ranking  of  flight  options  in  the  principal  display  shall  be  as 

set  out  in  the  Annex,  within  the  limits  specified  by  the 

consumer  at  any  one  time. 

(e) Criteria  to  be  used  for  ranking  shall  not  be  based  on  any 

factor  directly  or  indirectly  relating  to  carrier  identity  and 

shall 

be  applied  on  a  non-discriminatory  basis  to  all 

participating  carriers. 

3.  Where  a  system  vendor  provides  information  on  fares  in  a  separate 

display  this  display  shall  be  neutral  and  non-discriminatory  and  shall 

contain  at 

least 

the  fares  provided 

for  all 

the  flights  of 

participating 

carriers 

shown 

in 

the 

principal 

display.  This 

information  shall  be  made  available  within  the  limits  specified  by  the 

consumer  at  any  one  time. 

- 35 -

4.  Information  on  bundled  products  as  to,  inter  alia,  who  is 

organizing  the  tour,  places  available  and  prices,  shall  not  be 

displayed  in the principal display. 

Article 6 

1.  Information, statistical or otherwise, may  be made available by a 

system  vendor  from  its  CRS  only  in  accordance  with  the  following 

conditions: 

(a) information concerning  individual bookings on an equal basis to the 

air carrier or air carriers participating  in the service covered by 

the booking; 

(b) information  when  offered,  in  aggregate  or  anonymous  form,  to 

participating  air  carriers,  including  parent  carriers, on  a non 

discriminatory basis at the same time and to the same extent and on 

condition  that,  when  requested,  it  is  provided  with  equal 

timeliness,  subject  to  the  transmission  method  selected  by  the 

individual carrier; 

(c) other  information with the consent of the air carrier concerned and 

subject  to any agreement between a system vendor and participating 

carriers. 

2.  A  system  vendor  shall  make  available  personal  information 

concerning  a  passenger  and  generated  by  a  subscriber  to  others not 

involved  in the transaction only with the consent of the passenger. 

3.  A  system  vendor  shall  ensure  by  technical  means  and  appropriate 

safeguards at  least regarding software  that  the  limitations on access 

to information specified  in paragraphs 1 and 2 are complied with. 

-  36  -

In particular  in  the  case  where  the  same  technical  facilities  are  used 

by  the CRS  and  one  or  more  carriers  for  (its) their  own  activities,  the 

system  vendor  must  not  reserve  to  the  abovementioned  carriers,  data, 

processing  or  information  which  are  not  available  to  the  other 

participating  carriers,  or  which  are  provided  under 

different 

cond i t i ons." 

4.  Article  7(1) and  (2) are  replaced  by  the  following: 

"1.  The  obligations of  a  system  vendor  under  Articles  3  to 6  shall  not 

apply  in  respect  of  a  parent  carrier  of  a  third  country  to  the  extent 

that  its  CRS  outside  the  territory  of  the  Community  does  not  offer 

Community  air  carriers  equivalent  treatment  to  that  provided  under  this 

Regulation  and  under  Commission  Regulation  (EEC) No 

* 

2.  The  obligations of  parent  or_  participating  carriers  under  Articles 

3a,  4  and  8  shall  not  apply  in  respect  of  a  CRS  controlled  by  (an) air 

carrier(s) of  one or  more  third  country  (countries)  to  the extent  that 

the  parent  or  participating  carrier(s) 

is  (are)  not  accorded 

equivalent  treatment  outside  the  territory  of  the  Community  to  that 

provided  under  this  Regulation  and  under  Regulation  (EEC) No 

*0J  No L 

5.  Article  8  is replaced by  the  fol lowing:  : 

"1.  A  parent  carrier  shall  not,  directly  or  indirectly,  link  the  use 

of  any  specific  CRS  by  a  subscriber  with  the  receipt  of  any  commission 

or  other  incentive  or  disincentive  for  the  sale  of  air  transport 

products  available  on  its  flights. 

2.  A  parent  carrier  shall  not,  directly  or  indirectly,  require  use  of 

any  specific  CRS  by  a  subscriber  for  any  sale  or  issue  of  tickets  for 

any  air  transport  products  provided  either  directly  or  indirectly  by 

itself. 

-  37  -

3.  Any  condition  which  an  air  carrier  may  require  of  a  travel  agent 

when  authorizing  it  to  sell  and  issue  tickets  for  its  air  transport 

products  shall  be without  prejudice  to paragraphs  1 and  2." 

6.  Article  9(4), (5) and  (6) are  replaced  by  the  following: 

"4.  (a) A  system  vendor  shall  not  attach  unreasonable  conditions  to any 

subscriber  contract  allowing  for  the  use  of  its  CRS  and,  in 

particular,  a  subscriber  may  terminate  its  contract  with  a 

system  vendor  on  giving  notice  which  need  not  exceed  three 

months  to expire  no earlier  than  the  end  of  the  first  year. 

In  such  a  case  a  system  vendor  may  not  be  entitled  to  recover 

more  than  the  costs  directly  related  to  the  termination  of  the 

contract. 

(b) Subject  to  paragraph  2,  the  supply  of  technical  equipment  is 

not  subject  to  the  conditions  set  out  in (a). 

5.  A  system  vendor  shall  provide  in each  subscriber  contract  that: 

(a) the  principal  display,  conforming  to  Article  5,  is  accessed 

for  each  individual  transaction  except  where  a  consumer 

requests  information  for  only  one  air  carrier  or  where  the 

consumer 

requests  information  for  bundled  air  transport 

products  alone; 

(b) the  subscriber  does  not  manipulate  material  supplied  by  CRSs  in 

a  manner  that  would 

lead  to  inaccurate,  misleading  or 

discriminatory  presentation  of  information  to consumers. 

6.  A  system  vendor  shall  not  impose  any  obligation  on  a  subscriber  to 

accept  an  offer  of  technical  equipment  or  software,  but  may  require 

that  equipment  and  software  used  are  compatible  with  its own  system." 

-  38 -

7.  Article  10(1)  is replaced  by  the  following: 

"1.  Any  fee  charged  by  a  system  vendor  shall  be  non-discriminatory, 

reasonably  structured  and  reasonably  related  to the cost of  the  service 

provided  and  used,  and  shall,  in particular,  be  the  same  for  the  same 

level  of service. 

The billing  for  the services of  a CRS shall  be sufficiently detailed  to 

allow  the  participating  carriers  and  subscribers  to  see  exactly  which 

services  have been used  and  the  fees therefore." 

8.  Article  21  is replaced  by  the  following: 

"Article 21 

The  provisions  in  Article  5,  Article  9(5)  and  the  Annex  to  this 

Regulation  shall  not  apply  to  a CRS  used  by  an  air  carrier  or  a  group 

of  air  carriers  in  its  (their) own  office  and  sales  counters,  clearly 

ident ified as such." 

9.  Article  23  is replaced  by  the following: 

"Article  23 

The  Council  shall  decide  on  the  revision  of  this  Regulation  by 

31 December  1997, on  the basis of  a Commission  proposal  to be submitted 

by  31  March  1997  accompanied  by  a  report  on  the  application  of  this 

Regulation." 

10. The Annex  is replaced  by  the Annex  hereto. 

-  39  -

Art icle  2 

This  Regulation  shall  enter  into  force on  1 April  1993. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly 

applicable  in all  Member  States. 

Done  at  Brussels, 

For  the Council 

The  President 

-  40 -

ANNEX 

"RANKING  CRITERIA FOR  FLIGHTS OFFERING 

UNBUNDLED AIR  TRANSPORT  PRODUCTS 

1.  Ranking  of  flight  options  in  principal  displays,  for  the  day  or 

days  requested,  shall  be  in the  following order  unless  requested  in 

a  different  way  by a consumer  for  an  individual  transaction: 

(i) 

all  non-stop  direct 

flights  between  the  city-pairs 

concerned; 

(ii) 

other  direct  flights,  not  involving  a  change  of  aircraft, 

between  the city-pairs  concerned; 

( M i) 

connecting  flights. 

2.  Consumer  shall  at  least  be  afforded  the  possibility  of  having,  on 

request,  the  principal  display  ranked  by  departure  or  arrival  time 

and/or  elapsed  journey  time.  Unless  otherwise  requested  by  a 

consumer, a principal  display  shall  be  ranked  by departure  time  for 

group  (I) and  elapsed  journey  time  for  groups  (ii) and  (iii). 

3.  Where  a  system  vendor  chooses  to display  information  for  any  city-

pair  in  relation  to  the  schedules  or  fares  of  non-participating 

carriers,  but  not  necessarily  all  such  carriers,  such  information 

shall  be  displayed  in  an  accurate,  non-misleading  and  non 

discriminatory manner  as between  those carriers  displayed. 

- 41 

4.  If,  to  the  best  knowledge  of  the  system  vendor,  information  as  to 

the  number  of  direct  scheduled  air  services  and  the  identity  of  the 

air  carriers  concerned  is  not  comprehensive,  this  shall  be  clearly 

stated  on  the  relevant  display. 

5.  Flights  other  than  scheduled  air  services  shall  be  clearly 

identified. 

6.  Flights  involving  stops  en  route  shall  be  clearly  identified. 

7.  For  code-sharing  and/or  Joint  venture  flights  the  air  carrier 

actually  operating  the  flight  shall  be  clearly  identified. 

8.  A  system  vendor  shall  not  use  the  screen  space  in  its  principal 

displays  in  a  manner  which  gives  excessive  exposure  to  one 

particular  travel  option  or  which  displays  unrealistic  travel 

options.  For  direct  services,  no  flight  shall  be  shown  more  than 

once  in a principal  display. 

For  multi-sector  services  involving  a  change  of  aircraft,  no 

combination  of  flights  shall  be  shown  more  than  once  in a  principal 

display. 

9.  A  principal  display  shall,  wherever  practicable,  include  connecting 

flights  on  scheduled  air  services  of  participating  carriers 

constructed  by  using  a minimum  number  of  nine  connecting  points.  A 

system  vendor  shall  accept  a  request  by  a  participating  carrier  to 

include  an  indirect  service  unless  the  routing  is  in excess  of  130% 

of  the  great  circle  distance  between  the  two  airports.  Connecting 

points  with  routings  in excess  of  130%  need  not  be  used. 

10.  Flights,  involving  a  change  of  aircraft,  shall  be  treated  and 

displayed  as  connecting  flights,  with  one  line  per  aircraft 

segment." 

ISSN 0254-1475 

COM(92) 404  final 

DOCUMENTS 

EN 

15 

Catalogue number : CB-CO-92-625-EN-C 

ISBN 92-77-51368-3 

Office for Official Publications of the European Communities 

L-2985 Luxembourg