Competition Law in Tourism

40 COMPETITION LAW IN TOURISM Besides, a distinction shall be made between markets for package holidays (combining accommodation and other services in a given destination with return travel to and from it) and independent holidays (separate provision of flights and accommodation, in particular), provided by tour operators87. The former can be paid by instalments and the consumers are protected from the tour operator’s insolvency, while the latter does not envisage such advantages. Moreover, tour operators offer additional services in their package holidays, such as early check-in, access to airline lounges, 24-hour assistance, tour guides and so forth, which cannot be easily replicated by customers organising their own holiday independently88. Furthermore, a direct comparison by customers between the two is difficult and would lead to additional search and transaction costs, implying more risk in contracting separately89. Finally, the market for package holidays is generally more volatile and subject to trends90. More segmentation in package holidays is possible for short, medium and long-haul package holidays, being the distinction determined by a flight time substantially over three hours91, or possibly between domestic and foreign package holidays92. Furthermore, it may be possible to delineate package holidays’ markets per holiday type (e.g. “sun and sea” holidays, “city breaks”) or by destination93. Lastly, the market for foreign package holidays can be segmented by the holiday type, such as tour, club or à la carte package holidays. However, this issue was not addressed by the Commission94. As for flights and related services, multiple differentiations can be made. First of all, charter and scheduled flights belong to separate product markets: charter flights are defined as air transport services that take place outside the usual schedules, mostly through a hiring arrangement with a particular customer (e.g. a tour operator), charter companies frequently fly to destinations not serviced by schedule airlines, usually operating on a seasonal basis, with a relatively low frequency. Charter airlines differ from scheduled ones as the former rely on the 87 Case M.4601 KarstadtQuelle/MyTravel (2007), paras. 12-23; Case COMP/M.5462 – Thomas Cook Group/Gold Metal International (2009), paras. 8-13. 88 Case M.8046 – TUI/Transat France (2016), para. 23. 89 Case COMP/M.4600 – TUI / FIRST CHOICE (2007), para. 13. 90 Case M.8046 – TUI/Transat France (2016), para. 113. 91 Ibid. para. 40. 92 Case M.5867 – Thomas Cook/ Öger Tours (2010), para. 14. 93 However, the Commission did not deem it necessary in Case M.4601 – KarstadtQuelle/MyTravel (2007), para. 25. 94 Case M.8046 – TUI/Transat France (2016), para. 39.

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