IATA’S NEW DISTRIBUTION CAPABILITY (NDC) 569 in the aviation industry and to encourage innovation inter alia in the new business models such as NDC. The parliament deliberately promoted the NDC model. Furthermore, in a case relating to a merger13, the European Commission indirectly considered that NDC would rather be beneficial to airline distribution for aggregators (i.e. for GDS). It may be put forward that a similar view would be adopted towards travel agents. II.4. The GDS Surcharge Practice: a Dominance to be Prohibited? However, NDC deployment still faces mistrust and the introduction of the GDS surcharge did not help prevent concerns by the travel industry. While airlines based in America took a different approach and incentivised sales made through NDC, some European airlines decided to apply “GDS surcharges”14. The purpose of this surcharge was mainly to persuade in particular travel agents to prefer airlines’ NDC systems. From the airlines point of view, such a surcharge would be limited for the time of convergence of the available systems with NDC. However, airlines that decided to apply the GDS surcharge also negotiated in parallel an exemption with their partners to avoid paying this fee15. Additionally, agreements are also being concluded with GDS16; to avoid the GDS fee. In any case, the GDS surcharge has been poorly received by travel agents and GDS. This led, for instance, to ETTSA filing a complaint, in 2015, with the European Commission against Lufthansa on the grounds of abuse of a dominant position regarding its practice to apply a GDS surcharge to any sales made outside the airline’s platform under NDC. The Commission stated that it did not intend to act nor to make further investigations. It mentioned that it “no longer reflects market reality and that it may be revised in the future”17. ETTSA then filed another complaint before the ombudsman, in 201818. The complaint to the European Commission was based on the code of conduct of 2009 applicable to CRS/GDS, taking the view that the airlines platforms should be assimilated by a GDS and should then comply with the code of conduct 13 Commission decision in Case M.7802 Amadeus/Navitaire, 19 January 2016. 14 For instance, Lufthansa first started to apply GDS surcharge of 16 € per segment (but finally offered a discount of 20 € on sales made through its own channel through a new programme). It was followed by British Airways, Iberia, Air France-KLM. 15 For instance, special agreement between Air France and Havas Voyages-Selectour. 16 For instance, special agreement between Air France and Travelport. 17 Source: http://www.travelweekly.co.uk/articles/306823/ec-rejects-complaint-against-lufthansa. 18 Source: http://www.ettsa.eu/uploads/Modules/Mediaroom/20180719ettsacomplainttoeuropeanombuds man.pdf.
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