EU GDS Deregulation

Altitude with Attitude asks "to deregulate or not?"

The EU Commissoner - the adept M.Jacques Barrot http://ec.europa.eu/commission_barroso/barrot/index_en.htm - for Transport has been soliciting input on the need to deregulate the GDS market. As you probably know there is a significant difference of opinion on both sides of the Atlantic on the issue of GDS regulation. The current regulations on the EU side are set to be replaced. So the question is do we keep them or not?

With the US market deregulated for over a year - we have not seen the sky fall and arguably competition has crept into the market. So is there a case for retaining regulation?

Firstly it is important to remember that the markets are remarkably different. GDS bookings accounted for a significantly smaller portion of the total air travel market emanating from the EU than the US market. Why? A lot more LCC traffic and the lack of participation already is smaller. There is only one GDS with Airline ownership - hardly control - which is Amadeus. (Down significantly from its hey day with control now in the hands of Private Equity investors.)

Secondly the need for consumer protection is now less as there are better and greater obligations for passenger rights than in the US market.

Thirdly the consolidation of the TMC market in Europe into 4 major global players and significant regional ones lessens the need for tight regulation of the supply chain access system.

Our opinion is that there is no need to retain the GDS regulation and that it should be allowed to die quietly. However the EU is known for responding to pressure from certain quarters. There is a chorus being orchestrated (love the mixed metaphor) by BTC Chairman Kevin Mitchell (A US person) to get the EU Corporations to form up against the GDS deregulation. We believe that the regulation structure is now largely an anachronism in todays open markets.

We welcome other views and are happy to debate this issue.

Cheers

Timothy