6In BriefSOUNDBITE“Air travelers are cranky and have goodreason to be.”— Mary Peters, U.S. Secretaryof Transportation, last September, as PresidentGeorge Bush instructed aviation leaders toaddress <strong>the</strong> growing problem of congestion inU.S. airports.According to a government study 1 , more than 25 percent of all U.S. domesticnon-stop flights arrived late from January to August 2007, <strong>the</strong> highest level everrecorded. A total of 128 regularly scheduled flights arrived late (at least 15minutes after schedule) at least 80 percent of <strong>the</strong> time.The Federal Aviation Administration (FAA) responded immediately by askingU.S. and Canadian airlines to discuss voluntary reductions in <strong>the</strong>ir air schedules,starting at New York’s JFK, LaGuardia and Newark airports. (Any delays at <strong>the</strong>seairports, which handle a third of <strong>the</strong> nation’s air traffic, can cause a ripple effectacross <strong>the</strong> United States.) In addition, <strong>the</strong> FAA proposed congestion pricing asa way to encourage airlines to move some flights to off-peak slots.Several industry groups, including <strong>the</strong> Air Transport Association, condemned <strong>the</strong>suggestions as “anti-consumer” since <strong>the</strong>y limit choice. The International AirTransport Association also urged <strong>the</strong> U.S. government to avoid congestionpricing, which it says has never proven to be effective and “could invite disaster”by disrupting <strong>the</strong> interconnect schedules of international carriers.Meanwhile, a similar study of U.K. airports conducted by <strong>the</strong> Civil AviationAuthority indicated that 32 percent of scheduled flights were late from April toJune 2007, compared to 28 percent in <strong>the</strong> same quarter in 2006. <strong>Travel</strong>ersmay be cranky for some time to come …1Air <strong>Travel</strong> Consumer Report, issued October 2007
CWTvIsIon Issue 3 - January 2008INDUSTRY NEWS HIGHLIGHTSRegulationIn November, <strong>the</strong>European Commission (EC)revised its ComputerReservation System (CRS)Code of Conduct,introducing new rulesdesigned to boostcompetition in airlinedistribution whilesafeguarding against abusefrom dominant players (e.g.,biased screen display orselective provision ofcontent).The new regulation, whichnext goes before <strong>the</strong>European Parliament,enables CRSs (globaldistribution systems or GDSs)and airlines to freelynegotiate fees and <strong>the</strong>inventory provided. At <strong>the</strong>same time, specific rulesapply to parent carriers or“any carrier or rail-transportoperator which directly orindirectly, alone or jointly witho<strong>the</strong>rs, owns or effectivelycontrols a system vendor.”The Commission stated,however, that it no longerconsiders Air France-KLM,Lufthansa and Iberia asparent carriers, despite <strong>the</strong>irjoint ownership of 46.7percent of Europe’s largestCRS, Amadeus. Criticsimmediately expressed <strong>the</strong>irconcern at this legalloophole, claiming that it failsto protect <strong>the</strong> marketadequately from anticompetitivebehavior.In October, <strong>the</strong> UnitedKingdom and Singaporesigned a groundbreakingOpen Skies agreement thatremoves all restrictions on airtraffic between <strong>the</strong> twocountries, including flights toonward destinations. Airlineswill also be able to use bothcountries as hubs, meaningthat Singapore Airlines will be<strong>the</strong> first non-EU, non-U.S.carrier to have access to <strong>the</strong>London-U.S. market. The dealcomes into effect on March30, 2008, <strong>the</strong> same day as<strong>the</strong> EU-U.S. Open Skies deal.AirlinesIn an effort to attractmore business travelers,easyJet signed historicdistribution agreements withAmadeus and Galileo lastNovember. This marks <strong>the</strong>first time a major Europeanlow-cost carrier is providinginventory to globaldistribution systems. easyJetis applying a point-of-sale feeto airfares booked via a GDS,as it does for tickets soldoffline (by phone or atairports).The Airbus A380“superjumbo” made its firstcommercial flight in October,operated by SingaporeAirlines on its Singapore-Sydney route. The carrieroffers12 luxury double suitesat a 20 percent premium,thus reviving <strong>the</strong> “R” bookingclass that was last used for<strong>the</strong> Concorde. The airline alsoexpects to operate <strong>the</strong> A380on Singapore-London routesstarting in February. Boeing,on <strong>the</strong> o<strong>the</strong>r hand,announced it will not startdelivering its 8“Dreamliner,” a directcompetitor of <strong>the</strong> A380, untilNovember or December2008, at least six monthslater than planned.The U.S. Department ofTransportation (DOT) hasauthorized Delta Air Linesand United Airlines tooperate new non-stopservices to China in 2008and 2009 respectively, madepossible by an Open Skiesagreement signed by <strong>the</strong> twocountries last July. The DOTalso issued tentativeauthorizations for AmericanAirlines, Continental Airlines,Northwest Airlines and USAirways. All-business-classcarrier MAXjet’s applicationwas refused.The DOT granted antitrustimmunity to several StarAlliance partners, includingUnited Airlines and BritishMidland Airways. Thedecision, which authorizes<strong>the</strong> airlines to jointly plan andcoordinate services, will takeeffect with <strong>the</strong> EU-U.S. OpenSkies agreement on March30, 2008. Six SkyTeampartners were asked forfur<strong>the</strong>r information regarding<strong>the</strong>ir antitrust application,submitted in June.