WRITTEN QUESTION E-4019/00 by Doris Pack (PPE-DE) to the Commission. Discount systems operated by tour operators and air carriers.
Date: 2000-12-21
Institutions: European Parliament, Provisional data
Subjects: air transport, common transport policy, competition law, infringement of EU law, reduced price, transport company

C 235 E/48

Official Journal of the European Communities

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21.8.2001

The second phase of the project, concerning construction as such, will probably be proposed by the Greek
authorities for part-financing under the Community support framework in 2000-2006. Since the Southern
Aegean OP has not yet been approved, no decision on the matter has so far been taken.

It should be remembered that the part-financing of this work is conditional on strict compliance with the
environmental conditions and any further obligations which might be imposed by the Greek authorities on
the basis of Community and national legislation.

(1) Decision of 29 April 1997, ref. KYA A11 83607.
(2) OJ L 206, 22.7.1992.

(2001/C 235 E/052)

WRITTEN QUESTION E-4019/00

by Doris Pack (PPE-DE) to the Commission

(21 December 2000)

Subject: Discount systems operated by tour operators and air carriers

1.
The Commission announced an investigation into the discount systems operated by the various
European air carriers for discriminationatory elements. What was the result of the investigation? Were
systems such as Miles & More operated by Lufthansa in compliance with EU competition rules?

Do such fidelity discount systems serve as a tie to market dominant undertakings which constitutes

2.
a barrier to competition?

3.
Did the Commission examine the reduction in the commission paid by European air carriers to travel
agents in the light of the dominant position of those carriers and as discrimination against and exploitation
of travel agents? What was the outcome of these investigations?

4.
Does the Commission not consider the reduction in basic commission from 9 to 5 %, i.e. a reduction
in travel agencies(cid:146) ticket sales commission income by some 45 % for internal and European flights to be
discrimination or exploitation, especially where the carriers are market- dominant undertakings?

5.
The various incentive programmes run by the air carriers induce effects which are harmful to
competition. Have these programmes been investigated by the Commission? What were the findings?
What will the Commission do, if appropriate, to remedy the damage caused by incentive programmes?

6. What was the outcome of the Commission(cid:146)s examination of the increased participation of (national)
air carriers in international or global alliances? Do these alliances lead to agreements on fares, conditions,
timetables and services?

7. What does the Commission intend to do on the basis of its findings to prohibit alliances which
restrict competition, especially where these activities by airlines massively effect competition?

Has the EU directive been adequately transposed into national law in all Member States? If not, in

8.
which Member States has transposition been inadequate or not happened at all?

9.
Is the Commission aware of any abuse in relation to the mandatory insolvency insurance for tour
operators? Is there any information in this connection to indicate that in insolvency cases service providers
(hotels, air carriers, coach companies, service brokers, etc.) have submitted inflated bills? What will the
Commission do to abolish such abuses especially as in the final analysis the cost is passed on to the
consumer via higher insurance premiums?

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Answer given by Mr Monti on behalf of the Commission

(5 March 2001)

1.
The Honourable Member refers to a Commission investigation into discount systems operated by
European air carriers. This presumably is the series of competition investigations announced at the time of
the adoption of the Decision on British Airways(cid:146) incentive scheme for British travel agents (1). Following
this Decision British Airways has radically changed its incentive scheme for travel agents. As a result of the
ongoing Commission investigations of other Community carriers(cid:146) schemes for travel agents, revised
schemes are currently being presented to the Commission by other airlines. The Commission is taking all
measures necessary to ensure that the principles in the British Airways Decision are applied to other
Community airlines in equivalent situations.

However these investigations do not cover the (cid:145)Frequent Flyer Programme(cid:146) incentives offered by airlines to
individuals who travel with them. The Commission has not investigated the (cid:145)Miles and More(cid:146) scheme to
which the Honourable Member refers and has not made any statement as to the compliance or otherwise
of this or any other Frequent Flyer Programme with Community competition law.

To the extent that the phrase (cid:145)fidelity discount schemes(cid:146) refers to incentives offered by airlines to
2.
travel agencies the Commission(cid:146)s attitude to these and its current actions are described in its answer to the
Honourable Member(cid:146)s first question.

If, on the other hand, the phrase (cid:145)fidelity discount schemes(cid:146) refers to incentives such as (cid:145)Frequent Flyer
Miles(cid:146) granted to passengers, then it should be noted that the Commission has not yet taken a position as
to whether such schemes in themselves are in breach of Community competition law. However in its
examination of alliances between airlines, the Commission has identified the combining of the Frequent
Flyer Programmes operated by the parties to the alliance as a factor making it more difficult for third
parties to compete with the parties to the alliance and has proposed remedies to alleviate this effect (2).

3. and 4. With respect to the third and fourth question of whether reductions in the basic commission
paid by air carriers are in breach of Community competition law, the Commission would refer the
Honourable Member to its answer to Written Question P-0062/00 by Mrs Gebhardt (3).

5.
If what is meant by (cid:145)incentive programmes(cid:146) are incentive programmes operated by airlines for travel
agents, the Commission would refer the Honourable Member to its answer to her first question. If, on the
other hand, this phrase refers to incentive schemes such as Frequent Flyer Miles offered to passengers, the
Commission would refer the Honourable Member to its answer to her second question.

6. and 7.
The Commission is actively investigating a number of alliances between air carriers. These
alliances typically involve agreements between the parties covering one or more of fares, scheduling, route
selection and other aspects of providing an air service. Such agreement restricts competition between the
parties to the alliance. However alliances can also have benefits, for example, increasing the number and
quality of air services available to the public and increasing the efficiency with which these are provided.
Because of this, alliances can qualify for an (cid:145)exemption(cid:146) from the EC Treaty(cid:146)s prohibition of restrictive
agreement. To qualify for such an exemption, it has to be the case that competition is not eliminated on
any individual market, that the benefits of the restrictive agreement are passed on to consumers and that
the alliance is not any more restrictive than necessary to achieve the identified benefits. In all of these
cases, the Commission is taking the necessary steps to either impose remedies or obtain voluntary
undertakings so as to ensure that the condition for an exemption are met.

8.
The Commission understands that the Directive referred to is Council Directive 90/314/EEC of
13 June 1990 on package travel, package holidays and package tours (4). National provisions implementing
this Directive have been communicated by all Member States.

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The Commission is not aware of any evidence concerning the type of abuse of mandatory insolvency
9.
insurance described. Should evidence of such abuse come to light this would be a matter of concern to the
Commission and to the relevant Member State or Member States responsible for the implementation of the
relevant Directive.

(1) Commission Decision 1999/1973/EC British Airways, [2000], (OJ L 30, 4.2.2000).
(2) See for example Commission notice concerning the alliance between Lufthansa, SAS and United Airlines, [1998]

(OJ C 239, 30.7.1998).
(3) OJ C 280 E, 3.10.2000.
(4) OJ L 158, 23.6.1990.

(2001/C 235 E/053)

WRITTEN QUESTION E-4024/00

by Jeffrey Titford (EDD) to the Commission

(21 December 2000)

Subject: Terms on which European Commission staff are entitled to receive the dependent child allowance

On what terms are payments made to the dependants of European Commission staff?

1. What rate of exchange is applied to payments made by the Commission to the dependant(cid:146)s bank
account in the country of the dependant?

Do members of the European Commission(cid:146)s staff have to prove that the person is financially

2.
dependent on them?

3.

How is the dependent child allowance calculated?

Answer given by Mr Kinnock on behalf of the Commission

(13 March 2001)

The Commission only makes a payment to (the bank account of) a person other than the official (in the
name and on behalf of the official) if the member of staff does not have the custody of the dependant
children and if the custody has been entrusted to that other person by law or by an order of court or of
the competent administrative authority. In all other cases the Commission pays directly to the official(cid:146)s
bank account.

Article 2(2) of Annex VII to the Staff regulations defines a (cid:145)dependent child(cid:146) as follows: (cid:145)the legitimate,
natural or adopted child of an official, or of his spouse, who is actually being maintained by the official(cid:146).
Furthermore, Article 2(4) of Annex VII defines the conditions for a person to be treated as dependant child
as follows: (cid:145)Any person whom the official has a legal responsibility to maintain and whose maintenance
involves heavy expenditure may, exceptionally, be treated as if he were a dependent child by special
reasoned decision of the appointing authority, based on supporting documents(cid:146).

Payments are made in euros in all Member States having adopted the euro. In other Member States the
exchange rate used for the implementation of the general budget of the Community on 1 July 2000 is
used (€ 1 = GBP 0,6257 for the United Kingdom).

Based on supporting documents, the household allowance is paid to a married official or other servant
whose spouse is either not gainfully employed or whose salary does not exceed the basic salary of
a Grade C3/3 official or to an official or other servant who has one or more dependent children. The Staff
Regulations (1) set the household allowance at 5 % of the basic salary.