WRITTEN QUESTION E-2204/99 by Olivier Dupuis (TDI) to the Commission. Agreements in the air transport sector and compliance with competition rules.
Date: 1999-11-29
Institutions: European Parliament, Provisional data
Subjects: EU law, air transport, carriage of passengers, consumer information, consumer protection, control of restrictive practices, low cost airline, restriction on competition, restrictive trade practice, transport company

8.8.2000

EN

Official Journal of the European Communities

C 225 E/71

(2000/C 225 E/070)

WRITTEN QUESTION E-2202/99

by Luis Berenguer Fuster (PSE) to the Commission

(29 November 1999)

Subject: Commission initiatives on the rights of consumers entering into contracts with airlines

Liberalisation of the air transport sector has had significant benefits for consumers, most importantly a
if not implemented properly, deregulation can
greater choice of carrier and cheaper prices. However,
frequently have other, negative effects as a result of congestion in the skies and inadequate airport
infrastructures. Passengers are affected by delays, which result in missed flights and other inconvenience.
When such situations arise, the airlines hide behind the small print in the ticket purchase agreement to
evade their responsibility.

Does the Commission intend to adopt measures to establish the airlines(cid:146) responsibility and ensure that
passengers receive compensation when airlines do not adhere to their timetables or when their luggage is
lost?

Answer given by Mrs de Palacio on behalf of the Commission

(19 January 2000)

The Commission is about to begin a major consultation on air passenger rights in the Community with a
view to making a full assessment of the current situation and developing a new strategic approach to this
issue in the coming year. A consultation paper will be launched in the near future. It will seek the views of
both industry and consumers on delays and baggage, as well as a much wider range of other issues. Action
will be taken in the light of the reactions received. One specific action on giving information to passengers
has already been agreed for launch in the coming months (cid:129) the mandatory publication of punctuality
indicators for airlines and airports.

There is already some provision in Community law for compensation for delayed passengers who are late
arriving at their destination because the airline overbooked the aircraft. Such passengers are entitled to
immediate compensation of up to € 300 under Council Regulation EEC No 295/91 of 4 Febraury 1991
establishing common rules for a denied-boarding compensation system in scheduled air transport (1). A
proposal (2) to amend the Regulation,
improving the level of compensation and extending it to cover
passengers who are delayed because an airline cancels their flight,
is close to agreement. Extending
compensation any further than this would require careful consideration since a large proportion of delays
are caused by factors that are genuinely beyond the airlines(cid:146) control, notably air traffic delays.

the Warsaw Convention of 1929 sets low maximum limits of
As far as baggage is concerned,
approximately € 17 per kilo on airlines(cid:146) liability for any loss or damage during international journeys.
The new Montreal Convention of May 1999 raises this limit to approximately € 1 300 per passenger.
Compensation in excess of these limits is only possible where the passenger has agreed a higher figure in
advance with the airline and paid any extra charges needed to cover additional insurance.The Commission
will make proposals for Community ratification and implementation of the new Montreal Convention at
the beginning of 2000.

(1) OJ L 36, 8.2.1991.
(2) COM(98) 580 final.

(2000/C 225 E/071)

WRITTEN QUESTION E-2204/99

by Olivier Dupuis (TDI) to the Commission

(29 November 1999)

Subject: Agreements in the air transport sector and compliance with competition rules

In recent years, the Commission has been involved in analysing and regulating certain agreements between
airlines in order to safeguard openness and competition on the markets in question. To this end, in the

C 225 E/72

Official Journal of the European Communities

EN

8.8.2000

case of the alliances between British Airways and American Airlines, Lufthansa and United Airlines and
KLM and Alitalia, the Commission has imposed very tough conditions on the airlines in order that these
agreements may be considered as compatible with Community law.

Conversely, other agreements between airlines, although of a different nature, have received less attention
or have simply been neglected. This seems to be the case, for example, with the code-share agreement
between Sabena and Virgin Express on the Brussels-Rome route despite the fact that the immediate effect
of this agreement was to reduce the number of competitors and frequencies on that route.

Does the Commission not consider that this agreement reduces competition and, consequently, the
benefits to consumers in terms of quantity, quality and cost of the service?

More generally, what steps is it planning to take to counteract the anticompetitive effects of code-share
practices as well as the lack of transparency and information for travellers which these practices may
involve?

Answer given by Mr Monti on behalf of the Commission

(14 January 2000)

Through a code-sharing agreement, an airline can sell its tickets (using its own designator code) on a flight
operated by another airline. The flight is then identified by the designator codes of both airlines. Such
agreements are increasingly used by airlines, both inside and outside the Community. The Commission
estimates that the fifteen largest Community airlines have concluded over 150 code-sharing agreements.

Since 1996, when a study on code-sharing was prepared for the Commission, the Commission has taken
action to improve the transparency of these arrangements and ensure that passengers are better informed.
Council Regulation (EC) No 323/1999 of 8 February 1999 amending Regulation (EC) No 2299/89 on a
code of conduct for computer reservation systems (CRSs) (1) now foresees that, in case of code-sharing, the
actual operator of a flight must be clearly identified at the time a reservation is being made. This provision
ensures that a passenger who buys a ticket with an airline X is informed from the outset that he will
actually be flying with airline Y.

The compatibility of a code-sharing agreement with competition law depends on the contents of the
agreement and on the route or routes affected by it. Certain code-sharing agreements have the potential to
be pro-competitive. By lowering costs and increasing efficiency, a code-sharing agreement may for
example contribute to maintaining service on a low-density route or establish a new route. Other code-
in market sharing or prevent
sharing agreements can be anti-competitive because they may result
competitors from entering the market.

Code-sharing agreements must therefore be examined on a case-by-case basis. The Commission is at
present examining different types of code-share, notably agreements between flag carriers relating to the
route that links their respective hubs.

The Commission has not received any complaint regarding the code-sharing agreement between Sabena
and Virgin Express on the Brussels-Rome route (where Alitalia also operates). However, while the enquiries
now being carried out on other routes will help clarify which types of code-sharing agreements are
acceptable and which are not, the Honourable Member is welcome to provide to the Commission any
evidence in his possession which may show that competition on the Brussels-Rome route has been
restricted.

(1) OJ L 40, 13.2.1999.