GDS And OTA Lobby Escalates Lufthansa Complaint In Europe

A European trade body that represents global distribution systems and online travel agencies filed a complaint Thursday with a European watchdog. It alleges that authorities failed to adequately investigate Lufthansa Group's 16 euro global distribution system surcharge and to enforce European Union regulations.

Last year, the European Technology and Travel Services Association stated the European Commission was "dragging its feet" on what is now a nearly three-year-old investigation.

In September 2015, ETTSA filed a complaint with the EC that claimed Lufthansa's surcharge, introduced that same month, discriminated against indirect channels because the group did not apply the surcharge to its own travel agent portal. The association argued that Lufthansa's portal met the EU definition of a CRS, or computer reservation system, often used interchangeably with global distribution system.

European travel agent association ECTAA lodged a similar complaint with the EC in 2015.

Since then, other European airlines have followed Lufthansa in instituting comparable distribution strategies. In ETTSA's view, that has heightened the urgency for the EC to adequately conclude its investigation.

In May this year, the EC alerted ETTSA that it "took the preliminary view that it did not need to act upon the complaints," according to an ETTSA statement Thursday. "Rather than taking a position on substance, as one would legitimately expect after an assessment process lasting almost three years, the Commission said it intended to turn down the complaint merely on the basis that the [EU code of conduct for CRSs] 'no longer reflects market reality and that it may be revised in the future.'"

Indeed, European regulators are reviewing "all provisions" within that code of conduct, which is the governing GDS regulation in the EU.

ETTSA filed its latest complaint Thursday with the European Ombudsman, a watchdog organization appointed by European Parliament to investigate "complaints about maladministration in the institutions and bodies of the European Union."

In its complaint, ETTSA stated that the EC "failed to act within a reasonable time limit." Further, ETTSA rejected the EC's rationale to cease the investigation on the basis that CRS regulations may change in the future, "ignoring the fact that any changes to the present code of conduct would require the approval of the Parliament and the Council. 
Indeed, the Commission did not deny that Lufthansa's conduct is illegal but stopped short of enforcing EU law."

According to a statement from ETTSA secretary general Christoph Klenner, "Our complaint in front of the Ombudsman is only a first step. We also call on the services of [The EU Directorate-General for Competition] to rigorously look into Lufthansa's practices and those of the other large carriers that have followed its lead and are considering further actions."