Ebook Air Transport Policies and Frequent Flyer Programmes in the European Community - a Scandinavian Perspective
Travel and tourism are becoming steadily more important in the European Community. The European Community is estimated to be the largest travel and tourism region in the world. Even though the mega-market of North America and the European Community will fall just under the world growth average of 48.8 per cent between 1996 and 2006, the third largest region in terms of travel and tourism employment is the European Community and North America with 19.8 million and 18.1 million jobs, respectively. The European Community is the largest producer of travel and tourism gross output in the world with $1,154 billion expected from 1996. This represents 32.3 per cent of world travel and tourism output. Over the past few decades, as per capita income has risen and families and individuals have gained more holiday and vacation time, travel and tourism have become major elements in the typical household budget worldwide.
The largest concentration of consumer spending on travel and tourism is centred in the industrialized regions of the European Community, North America and Northeast Asia with $639 billion, $622 billion and $452 billion, respectively, estimated for 1996. Consumer demand for travel and tourism services in 1996 is expected to be particularly high in the European Community in which travel and tourism are expected to account for 13.4 per cent of consumer budgets. The European Community is the region with the largest government funding for travel and tourism with estimated 1996 expenditures of $120 billion.
Air transport is a vital element in travel and tourism services. The European Community has radically changed the regulation of air transport services in recent years. To start with, the European airlines were national airlines and regulated by bilateral agreements between the European nations. Liberalization began in 1986, when measures adopted by the European Council of Ministers came into operation as the Single European Act was signed and reached its full implementation on the coming into operation of the third package on 1 January 1993 and in May 1997. The intention was to allow free-market forces to shape the airline industry. One result of the liberalization process was that European airline companies were able to make use of marketing strategies such as frequent flyer programmes which they copied from the schemes originally developed on the American market for air transport. FFPs became an important factor in the competition between European airlines as each airline attempted to retain particularly their business travellers as its loyal customers.
The aim of this monograph is to examine frequent flyer programmes in the light of general air transport policies in the European Community. In order to do this, the concept of frequent flyer programmes will be examined first (Part I). Then a brief overview of world regulation of air transport in the context of the Chicago Convention of 1944 and deregulation in the United States in 1978 follows. The open skies policy and bilateral agreements which are part of the world regulation of air transport will also be referred to in Part II. In addition, a brief study of the policies for air transport from regulation to liberalization in the EC with particular reference to the EC Treaty Article 84(2) about air transport, and Articles 85 - 86 about competition, will be made in Part II. In this context, privatization and state aid regulated by Articles 92-94 of the EC Treaty, as well as airline partnership agreements and Commission control according to Article 85 as well as the Merger Regulation 4064/89 will also be examined.
In Part III the historical development of frequent flyer programmes (FFPs) in the US and the introduction of FFPs by European airlines will be examined. Closely connected with FFPs both in the US and in the European Community are computer reservation systems, which will also be referred to in Part III. Finally, the role of FFPs in the Scandinavian countries will be described in this section. The purpose of the study is to make a case for regulation of frequent flyer programmes and to put forward proposals for such regulation. This will be done in Part IV.
Contents
Introduction
Part I. The frequent flyer programme - concept and problem
- A. Discounts and price reductions
B. The frequent flyer programme - concept
C. Frequent flyer programmes - the problems
Part II. The international and EC legal framework governing the market for air transport
1. World regulation of air transport - with particular reference to deregulation in the US
- A. The Chicago Convention 1944
B. Deregulation in the United States 1978
2. From regulation to liberalization in the EC
- A. Background
B. From the first to the third package
C. After the third package
D. Competition rules
3. Privatization and state aid
- A. Privatization
B. State aid
4. Airline partnership agreements and Commission control
- A. Airline partnership agreements
B. Airline partnership agreements and competition, Article 85 of the EC Treaty
C. Airline take-overs, mergers and concentrations
Conclusion to Part II
Part III. The historical development of frequent flyer programmes
- A. FFPs in the US
B. FFPs in the European Community
C. FFPs in the Scandinavian countries
Conclusion to Part III
Part IV. Proposals for the Regulation of FFPs
- A. Frequent flyer programmes as loyalty programmes and collateral gifts in Scandinavia
B. The special features of FFPs
C. Regulating FFPs
D. The principal-agent problem. Should FFPs be taxed?
Bibliography
- Books and reports
Articles
EC legislation (Regulations, Directives, Decisions)
Other EC material
Legislative material - other legislation
Judgments and decisions - the European Court of Justice
Judgments and decisions - other sources
Posted in :
