The European Travel Agents’ and Tour Operators’ Association (ECTAA) lodged a complaint this week with the European competition authority against International Air Transport Association (IATA) for restricting competition in the market for air ticket distribution.
The association representing some 70,000 travel agents and tour operators in Europe, is requesting the European Commission investigate “infringements of competition rules caused by IATA’s Passenger Agency Program (PAP)” and to put these infringements to an end.
According to the ECTAA statement, “the commercial relationship between travel agents and airlines has evolved and has nothing to do anymore with the former agent-principal relationship”, adding that airlines are now directly competing for ticket distribution with agents, “while the classical commission-based remuneration schemes have been abandoned”.
ECTAA goes on to add that “unchanged however is that airlines impose very strict, unilateral and disproportionate contractual constraints on travel agents for the distribution of tickets, namely through IATA’s PAP”.
“Indirect distribution of air tickets is dangerously hurt by the abuse of IATA’s dominant position, while it is needed more than ever to help consumers navigate through a jungle of complex ticket offers including a growing number of ancillary services,” said Pawel Niewiadomski, president of ECTAA.
The association points out that the current Passenger Sales Agency Agreement, signed by all IATA-accredited agents, was drafted 40 years ago and is “no longer in line with the economic reality”, adding that the PAP is organized as a dominant system that restricts competition.
All efforts made towards ensuring a level-playing field between all distribution channels to preserve the interest of consumers and businesses, ECTAA said, and to update the PAP have “systematically been rejected”.
The ECTAA concludes that “agents have no say in the decision-making process and are powerless when it comes to setting the rules” due to the recent introduction of NewGen ISS – IATA’s settlement system currently being rolled out.
IATA represents some 290 airlines or 82 percent of total air traffic.