WRITTEN QUESTION E-0351/04 by Roberta Angelilli (UEN) to the Commission. Travel agencies: serious difficulties for operators and customers.
Date: 2004-02-12
Institutions: European Parliament, Provisional data
Subjects: European Commission, air transport, consumer protection, distributive trades, economic consequence, market intervention, self-regulation, ticket, transport company, travel agency

3.4.2004

EN

Official Journal of the European Union

C 84 E/779

Whilst the Commission supports, in principle, WHO recommended therapeutic protocols for malaria or
other diseases in developing countries, it holds the clear view that decisions on such strategies have to be
made by the country concerned based on local conditions.

(1) COM(2003) 93 final.

(2004/C 84 E/0875)

WRITTEN QUESTION E-0350/04

by Roberta Angelilli (UEN) to the Commission

(12 February 2004)

Subject: Travel agencies: repercussions of the Alitalia crisis on employment

The crisis affecting Alitalia is likely to damage other sectors connected with air transport, in particular
travel agencies.

The industrial restructuring plan under discussion at present envisages drastic cuts in the commission paid
to agencies (cid:1) from 7 % to 1 % on the sale of international tickets and from 3 % to 1 % on the sale of
domestic tickets.

As reported by the national representatives of associations of travel agents, these decisions may lead to the
closure of hundreds of agencies. This means that more than 10 000 jobs, about four times as many jobs as
those threatened in Alitalia, are at risk.

Furthermore the cuts, which would result in a rise in air fares, would have other repercussions on
consumers. The end user would have the practical problem of obtaining tickets, because agencies are
obliged to refuse to provide a service which has become too expensive.

It should also be noted that operators in the sector were informed of these decisions, unprecedented in
Europe, only 60 days in advance.

In view of the serious consequences such a move would have on employment and bearing in mind that
travel agencies are the main channel for air-ticket sales, since they manage 91 % of ticket turnover, and
hence a crisis in the sector would impact not only on Alitalia, worsening its already precarious position,
but also on all other European airlines, can the Commission say:

1. whether the European Union has the power to intervene in the matter, in accordance with policies to

safeguard employment or by virtue of any other relevant competence;

2. how it views the matter as a whole?

(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

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Official Journal of the European Union

EN

3.4.2004

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.

in order to justify the cuts, claim that they need to cope with
It is a serious problem that airlines,
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
‘airmiles’, free
scheduled airlines do not reduce the privileges for frequent travellers, such as discounts,
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