ERA presentation at the European Parliament

19 March 2020: A working breakfast titled 'Higher Cost for European Consumers and SMEs through Airline Consolidation; took place in the European Parliament in mid-February. Jörg Troester, Head of Corporate Strategy, Industry and Government Affairs at ERA member Hahn Air presented the association’s view on airlins and aircraft manufacturer consolidation, as well as its position on and the effect the airline ticket distribution market has on consumers.

Institutional and industry stakeholders together with several MEPs gathered in order to create an informative and sustainable discussion with the aim to open further dialogue regarding the main topics addressed: airline consolidation and ticket distribution market. In today's connected world, travelling enables in-person relationships and broadens our horizons. Over the last few years, the travel industry has undergone a major transformation through mergers and venture partnerships. But, while airline consolidation may improve customer experience thanks to streamlined service, fare compatibility, and frequent flyer programmes, it can also limit customer choice. By redirecting traffic towards their own websites and limiting the amount of information available online, airlines can prevent independent platforms from offering the possibility of neutral comparison shopping to consumers.

ERA stressed that a strong and effective competition policy in the aviation industry is needed: one that fosters competition on an equal footing, protects consumers and provides real value to the European economy. In light of the upcoming revision of the CRS Code of Conduct, it is important to discuss how a consolidated airline market impacts SMEs, consumers and therefore should be taken as wider context for this regulatory review. ERA and EPF representatives also raised attention to both of their recently released position paper on the importance of an updated CRS Code of Conduct that reflects the new competition environment of the airline market, and that continues to protect consumers and safeguard free competition. Consolidation arguably leads to positions of strength in certain markets, which in turn leads to the deployment of measures by some airlines that restrict consumer’s ability to compare offers and services. Smaller-sized airlines also suffer from a consolidated marketplace: it is very difficult for them to effectively compete in a market which is predominately controlled by large airlines who are exploiting their economies of scale.