ABTA loses case against BA

Thursday, 12 Dec, 2002 0

ABTA’s complaint against BA for reducing its commission payments has been ruled out by the Office of Fair Trading, but ABTA might appeal.

ABTA alleged that BA had abused its dominant position by excessively reducing payments to agents. But the OFT ruled that BA had not infringed the Competition Act 1998.

ABTA director, Sandy MacPherson (pictured) told TravelMole: “Obviously we are extremely disappointed with this outcome. But it has taken the OFT an unusually long time to make the decision, so that says to me this was a pretty close run thing”.

Earlier this year, BA reduced commissions from £6 to £2.50 on shorthaul economy tickets and from £11 to £5 on shorthaul premium tickets.

ABTA claimed that BA’s commission payments did not leave agents with enough to cover their costs. Mr MacPherson told TravelMole: “I cannot think of any other industry where those who distribute a product for a supplier do not have their costs covered for doing it. That is what BA is doing and that cannot be right”.

However the OFT has ruled that this is not the case. A statement from the OFT said: “As with other providers of retail services, travel agents are free to recoup their costs from other consumers through a mark-up or service fee.

“The OFT has decided that such price differences between online and agency tickets would not be abusive. Different means of selling tickets have different costs and the additional service provided by travel agents, such as searching for available routes and schedules, could feasibly be reflected in the price they charge”.

Mr MacPherson told TravelMole: “It is not the end of the line for us. ABTA has subscribed to a campaign organised by ECTA to take the whole question of airline renumeration to the EU.

“The OFT statement has been passed on to the ABTA legal council to decide if we have means of appeal”.

Read our previous stories:
17-June-2002 Loser Ryanair criticises ABTA court action
07-May-2002 ABTA says its has strong case against BA
02-May-2002: ABTA votes to take BA to OFT
25-Apr-2002: Time running out for BA as ABTA prepares to make OFT decision
16-Apr-2002: bmi says it won’t adjust commission until October
13-Feb-2002: BA cuts Fresh Approach payments
23-Jan-2002: BA and ABTA at loggerheads over Fresh Approach