Global distribution system specialists Amadeus and Sabre are defending their operations in the face of a formal European Commission probe into possible violations of competition law.
The Commission is opening an investigation into the relationship between the distribution companies and their airline and travel agency clients, to assess whether terms of their agreements restrict the use of alternative distribution channels.
European competition commissioner Margrethe Vestager says the probe will concentrate on “possible restrictions” in the ticket distribution market.
“We are concerned that such restrictions could create barriers to innovation and raise ticket distributions costs,” she adds, pointing out that passengers would ultimately bear the costs.
Amadeus says it has expected such an investigation “for some time”, adding that it will “fully and openly” co-operate with the inquiry, and stressing that it needs to take into account “all relevant factors”.
“The process will confirm that Amadeus’ business practices are fully aligned with legal and regulatory requirements,” it states.
“It is well documented that the neutral marketplace provided by the [global distribution system] is facilitating comparison and choice.”
Airlines are free to choose which products and services they provide to customers through Amadeus, it adds, and travel agents are similarly free to work with one or more distribution systems in the market.
“Airline distribution is affected by many interdependent factors, including the commercial behaviour of airlines and airline groups,” says the Spanish-based company. “The review of any one factor must take into account its dependence and impact on all other factors to avoid undermining the neutral marketplace and thereby harming consumers.”
While the probe will be undertaken “as a matter of priority”, the Commission stresses that the opening of an inquiry does not “prejudice” the outcome, and adds that there is no formal deadline to close the investigation.
US-based Sabre insists its agreements and contracts with airlines and agents are “pro-competitive”, and that it will “co-operate fully” with the Commission.
It points out that the “vast majority” of airline “recognise the value” of full-content agreements for their customers, and choose to participate in the Sabre system at this level.
But it acknowledges that an airline is also able to choose “less than full-content agreements”, depending on the carrier’s particular strategy or market approach.
Sabre says it believes full content or parity clauses are “in the best interest” of consumers, providing comparability and transparency.
But it adds: “We also recognise that the airline industry is a highly-competitive marketplace and many airlines today are looking for ways to differentiate themselves and create brand loyalty.”
Amadeus and Sabre have had previous involvement with the Commission’s competition regulators, when the creation of a payment platform joint venture, to settle travel-related payments, was approved in 2007. This venture, called Moneydirect, was cleared partly because it was not closely related to the two companies’ global distributions business.
Source: Cirium Dashboard