Economic Policy Section (ECP)

Article 2 — Terminology

The term includes so-called "multi-access" CRSs (i.e. those which only provide subscribers with direct access to individual air carrier CRS displays through a common switching centre and/or interface) although such systems are exempted by Article 12 f) from certain obligations of system vendors which they are technically incapable of meeting. There are currently very few of these systems and unlike the CRSs with multicarrier principal displays which function globally, they are national or regional in scope. They are included so that, to the extent possible, both types of CRSs will have the same obligations and operate under the same rules.

Certain States may require an element of air carrier ownership in the CRS as a legal predicate for regulation by air transport authorities. Although this term does not require such ownership, neither does it preclude it and, as pointed out below, CRSs which currently meet the definition in the Code are owned by air carriers. However, States which rely on air carrier ownership as their basis for regulating CRSs should bear in mind that many different entities which are not owned by airlines could fall within the Code's definition of a CRS. In any case States need to ensure that all CRSs to which the Code applies are regulated in a fair and non-discriminatory manner.

System vendor [clause b)]. When CRSs were in their infancy, they were usually directly owned and operated by individual air carriers. Today major CRSs tend to be owned by groups of carriers and operated as independent businesses. Irrespective of the ultimate ownership or control of a CRS, this clause identifies the system vendor as the entity that operates or markets the CRS concerned, i.e. it is expected to be the entity (or entities) with which a subscriber contracts for CRS services but could include (as necessary) any related entity within the jurisdiction of the regulatory body, such as a carrier which is an owner or a part-owner of the CRS.

Participating carrier [clause c)]. Although participating carriers generally enter into an agreement with the system vendor and pay fees for the various services provided, the term can also include the system vendor itself in those cases where the vendor is an air carrier or air carriers.

Not all carriers whose air transport services are included in a CRS are participating carriers. Some system vendors choose to display information regarding other air carriers (referred to in these Notes as "non-participating carriers"), often with the advice to subscribers that for reservations they should contact the carrier directly.

Subscriber [clause d)]. Users of a CRS are only considered to be "subscribers" if they use the CRS for the sale of air transport services to the general public. This limitation means that in practice most subscribers to CRSs are travel agents.

Article 3 — Scope of Application

Although the Code does not apply to domestic passenger air service products, States are free to use the Code to regulate this area of air transport. For consistency and other reasons (such as the increased expense and technical difficulties in providing separate displays for domestic and international services) States are likely to find it desirable to follow the same CRS regulations for both domestic and international services.

The scope of the Code includes, but is not limited to, the distribution of international air service products through CRSs to subscribers. Distribution via other means, such as directly to air transport users through telecommunications networks and personal computers, may fall within the scope of the Code, depending on whether the entities concerned meet the definitions of "system vendors" or "subscribers". The general principle underlying the scope of the Code is that CRSs which are used to distribute air service products directly or indirectly to air transport users and through which reservations can be made on such services are subject to the same rules and obligations.

Except where States have determined that the Code applies to computer information services the Code would not apply to information-only systems, such as the electronic database marketed as the OAG, and the various travel networks available on the Internet (where these do not include reservation capability).

It follows from the definitions of a CRS and of a subscriber in Article 2 the Code would not apply to:

• the non-air transport portions of any systems (for example those devoted to inclusive or package tours, accommodation, car rentals, etc.);
• systems that are used by an air carrier solely in-house or in its own sales offices (on the grounds that anyone contacting a particular carrier would expect to be offered products preferred by that carrier); and
• systems that are not used for the sale of air transportation to the general public, such as corporate travel departments.

However, in recent years in some States and regions the distinction between international scheduled and nonscheduled flights has blurred considerably, raising the possibility that nonscheduled flights could be included in the air transport services portion of CRSs (i.e. the principal displays). The Code applies to nonscheduled flights on the basis of the general principle in sub-clause i) that they meet the same conditions which are applied to scheduled air service products, including the obligations of air carriers. As a practical matter, this will require considerable changes in how nonscheduled flights have been traditionally operated and marketed. However, where operators of nonscheduled flights are willing to make the necessary changes and assume the necessary obligations, they should be permitted to use CRSs to market their air service products in the same manner as operators of scheduled air services.

Three steps are necessary to ensure that subscribers and air transport users can identify nonscheduled flights in principal displays and that prospective passengers are informed of nonscheduled flights and the conditions concerning them. The first step required (in Article 9 b) ii)) is for air carriers, in the information they provide to system vendors to identify as a nonscheduled flight any service which does not meet the following definition of a scheduled international air service adopted by the ICAO Council:

A scheduled international air service is a series of flights that possesses all the following characteristics:

a) it passes through the air-space over the territory of more than one State;

b) it is performed by aircraft for the transport of passengers, mail or cargo for remuneration, in such manner that each flight is open to use by members of the public;

c) it is operated, so as to serve traffic between the same two or more points, either

i) according to a published timetable, or

ii) with flights so regular or frequent that they constitute a recognizably systematic series."

The second step to enhance transparency for nonscheduled flights is for vendors to clearly identify such flights in their principal displays (required by Article 7 g) i)). The third step is for subscribers to inform prospective passengers if a flight is nonscheduled and of any special conditions pertaining to it (Article 10 d)).

Article 4 — Obligations of States

Compliance [clause a)]. Any State following the Code is also required to ensure compliance by system vendors, air carriers and, where practicable, subscribers for their CRS activities in its territory. In addition, States which have determined in accordance with Article 3 a) that the Code should also be applicable to computer information services will also have to determine how to ensure compliance with respect to information-only systems. States will employ their own means of achieving compliance. In usual circumstances, the regulation concerned will be part of the systems of regulating air transportation by the States. Some regulatory bodies may have limited enforcement capabilities, particularly as regards subscribers, and this is taken into account by the qualification "where practicable". Some aspects of the Code may be covered in some States by more general legislation (for example, regarding competition, trade, data protection, etc.).

Ownership of CRSs [clause b)]. With ownership or control of many CRSs now being exercised by several air carriers (rather than by a single carrier), major CRSs tending to be operated as separate business entities, and with the influence of government regulation, the air transport advantages that originally accrued to a carrier that owned or controlled a CRS have been substantially reduced. Given the importance of CRSs in the marketing of air service products and the desirability of enhancing their fair, competitive and nondiscriminatory operation, it is clearly desirable that ownership or control of CRSs be widened as much as possible, including the increased involvement of air carriers and other entities of developing countries. Consequently, this clause calls on States to remove regulatory obstacles, if any, to investment in CRSs domiciled in their territories by air carriers or other entities domiciled in other States which follow the Code. The intent of this condition is to encourage the reciprocal removal of regulatory obstacles to investment in CRSs between and among States following the Code while not requiring it for States not following the Code. However, the Code does not prevent States from removing such obstacles for States not following the Code if they wish to do so.

Market access [clause c)]. A State following the Code is required to allow system vendors which comply with the Code to provide their CRS services in its territory, subject to two conditions. The first is a requirement for nondiscriminatory treatment in view of the objective in Article 44 of the Convention on International Civil Aviation (Chicago, 1944) to avoid discrimination between States. The second condition is that the provision of such services be consistent with any obligations which the State has as a result of bilateral or multilateral agreements or arrangements to which it is a party. This includes, for example, provisions in bilateral agreements dealing specifically with market access for CRSs, or more general clauses such as those concerning a fair and equal opportunity to compete in the air transport market (which a foreign air carrier may associate with the provision of services by a CRS which provides a principal display). Multilateral agreements would include, for example, obligations assumed by States which are parties to the General Agreement on Trade in Services (GATS), thereby helping to avoid any conflict between obligations of States which follow the Code and are also parties to the GATS. Multilateral arrangements would encompass CRS regulations or Codes which are applied on a regional basis, such as those of the European Commission (EC) and the European Civil Aviation Conference (ECAC).

Impartiality [clause d)]. A State following the Code is required to treat all system vendors, whether national or foreign, impartially. For example, any national requirements that apply to system vendors regarding access to and use of communications facilities, selection and use of technical hardware and software, installation of hardware or any other aspects of CRS operations or sales, should not have the effect of favouring one system vendor over another.

Free flow of CRS information [clause e)]. In order to meet the reservation and related requirements of air transport users, air carriers need to have free flow of the relevant information across and within national borders. However, the counterpart is that there must be safeguards regarding the privacy of personal data, which is covered in Article 11.

Intergovernmental consultation processes [clause f)]. The intent of this provision is to ensure that a State following the Code will employ to the fullest extent practicable the internationally accepted conflict resolution tool of intergovernmental consultations to resolve any CRS dispute involving another State following the Code, rather than allowing or requiring private parties (air carriers, system vendors) to take unilateral actions. A State following the Code may also wish to use such consultations in disputes involving States not following the Code.

Actions not in conformity with the Code [clause g)]. This clause identifies two circumstances in which it would be acceptable for a State following the Code to allow or require air carriers and/or system vendors under its jurisdiction to take action not in conformity with it.

The first is a need to address a lack of CRS reciprocity in a State not following the Code. This is necessary because air carriers of States not following the Code can be expected to benefit from some of the Code's provisions, such as those guaranteeing participation in a CRS (Article 5, clause a)), those requiring principal displays of information concerning participating carriers (Article 7, clauses b) through h)), or those regarding information generated by a CRS (Article 5, clauses j) and k)). If such benefits are not reciprocated in a State not following the Code (for example, if a system vendor in that State were to refuse participation in its CRS to an air carrier of a State following the Code), States which follow the Code should be free to withhold them. A lack of CRS reciprocity may also result when a developing State invokes the exception in Article 12 c).

The second circumstance would be if intergovernmental consultation processes with another State following the Code (as foreseen in clause f) of this Article) or with a State not following the Code were to fail to resolve any CRS dispute.

In both sets of circumstances, air carriers and/or system vendors should only be allowed or required to take actions that are appropriate and proportionate to the particular situation concerned. In addition, in allowing or requiring air carriers and/or system vendors to take actions not in conformity with this Code, States should of course take into account both the impact this might have on the quality of information made available to air transport users and any possible implications this might have for other interested parties, and notably for those following the Code.

Article 5 — Obligations of System Vendors to Air Carriers

However, since system vendors need to recover the substantial costs involved in establishing and operating CRSs, air carriers are guaranteed participation only if they are prepared to pay the requisite fees and to accept the system vendor's standard conditions.

Implementation of this clause might oblige some system vendors to expand the capacity of their CRSs in order to meet air carriers' requests to participate. Should such expansion pose problems, the matter should be referred to the appropriate regulatory authorities.

Exclusive use of a CRS [clause b)]. The intent of this clause is to ensure that an air carrier's freedom to participate in any CRS is not compromised by a system vendor requiring participation in its CRS exclusively or for a certain proportion of the carrier's activities, such as reservations or sales. This clause is not intended to prevent air carriers that own a CRS entering into agreements among themselves regarding their participation in that CRS.

Extraneous conditions [clause c)]. The intent of this clause is to ensure that an air carrier's freedom to participate in a CRS is not compromised by a system vendor imposing conditions on such participation that are not reasonably and directly related to the process of distributing a carrier's air transport products through the CRS, such as a required purchase or sale of any other goods or services, obligatory participation in codesharing, interlining or frequent flyer programmes. This clause does not apply to, nor is it intended to preclude, a vendor including other provisions of a general nature which are commonly found in commercial contracts, such as payment provisions.

No discrimination among participating carriers [clause d)]. This clause obliges a system vendor to treat all carriers which have chosen to participate in its CRS in a nondiscriminatory manner, and in particular with respect to offering them enhancements in the form of both new services and improvements to existing ones. The term "timely" means that an enhancement should be offered to all participating air carriers at approximately the same time. The qualification recognizes that there may be technical constraints which prevent this (in terms, for example, of situations in which air carriers may not acquire the capability of using a new program or function at the same time, or may have different capacities for processing data). The nondiscriminatory requirement also means that a carrier with an ownership interest in a system should not receive any preferential treatment regarding CRS services.

Fees [clause e)]. This clause establishes three criteria for any fees charged by a system vendor to participating air carriers. Firstly, fees should not be discriminatory. This is a general principle to apply to all aspects of a vendor's fees, but does not mean that fees cannot vary for different levels of service or types of functionality (a specific nondiscriminatory requirement with respect to the same levels of service is contained in sub-clause iii). Secondly, fees should be structured in such a way that all carriers that wish to participate can do so at a level and to an extent they find appropriate to their needs. Charges for different levels of participation or particular enhancements may vary, and the cost to participating carriers will consequently vary depending on their level of participation. However, a fee structure based on an initial payment plus charges related to the level of activity (for example, a charge per reservation or per transaction) may preclude participation by small carriers if the initial payment is too high. "Small" is deliberately not defined because it is likely to vary from one market to another. The intent of this provision is to accord fair treatment to small carriers rather than to promote discrimination in their favour or cross-subsidization between categories of participating carriers.

The third criteria provides States with a principle for determining the reasonableness of both the structure and level of fees charged to air carriers by vendors in view of widespread concerns about the costs for air carriers to participate in CRSs. Relating fees to costs affords a degree of protection for air carriers of developing countries which are particularly concerned about the possibility that their carriers could be excluded by large CRS companies charging high fees. States will have to determine how best to implement this criteria, depending on the competitive situation, analytical capability and their particular circumstances.

Billing information [clause f)]. The purpose of this clause is to ensure that air carriers will be able to verify the accuracy of their bills for CRS services. Requiring vendors to offer this information in electronic form enables air carriers which wish to do so to use computer programs for automated auditing and analysis of their bills. The information on billing should contain, but need not be limited to, the type of CRS reservation and level of functionality, passenger name or names, number of passengers, country, IATA/ARC agency identification code (if available), city code, city-pair or segment, reservation date (transaction date), flight date, flight number, reservation status, class of service, PNR record locator, and reservation/cancellation indicator. Enhancing the ability of air carriers to verify quickly the source of individual reservations for which the air carrier is charged will help to identify types of reservations which the air carrier may not wish to be made, such as duplicate reservations.

Contract cancellation [clause g)]. Some States have found that a cancellation provision based on time tends to mitigate some of the undesirable aspects of excessively long contracts. For example, sub-clause i) reflects that the EC and the ECAC CRS Codes require contracts permitting an air carrier to cancel a contract at any time after one year, with six months notice. Alternatively, to take into account variations in contract termination practices in other jurisdictions, sub-clause ii) leaves the details of the required notice to national law.

Loading of information regarding participating carriers [clause h)]. Increased competition and the widespread use of CRSs have encouraged air carriers to change schedules and tariffs much more frequently than they did in the past, either on their own initiative or in response to other carriers' changes. Subscribers need to be aware of such changes as quickly as possible and any delays could have substantial commercial implications for the carriers concerned. In order to guard against the possibility that a system vendor that is also an air carrier might seek to delay the effective implementation of changes by participating carriers with which it may be competing, this clause requires a system vendor to load information provided by participating carriers with consistent and nondiscriminatory standards of care, accuracy and timeliness. This applies (subject to any constraints imposed by the carrier's loading method) whether the information is received directly from a participating carrier or via an intermediary.

The "nondiscriminatory" element in this clause also applies to any special data loading capability provided by a system vendor and is intended to ensure that if it is provided to one participating carrier it should be offered to all participating carriers.

Manipulation of information [clause i)]. Once a system vendor has loaded the information received from carriers, it may need to manipulate this information for technical reasons (for example to reassemble it in another format). The purpose of this clause is to ensure that any manipulation of this information does not result in information being displayed in an inaccurate or discriminatory manner.

Single reservation information [clause j)]. Since some CRSs process millions of sales transactions involving many different subscribers and participating carriers, they are capable of accessing a wide range of sales-related data that could be of great importance to carriers for marketing purposes (for example, data on the reservation behaviour of passengers or subscribers, or data on the traffic and yields of carriers). In order to guard against the possibility that carriers might seek to gain an unfair commercial advantage by gaining access to sales-related data in a CRS, clauses j) and k) determine the extent to which such data may be made available. (A more general, but related obligation appears in Article 11 b), safeguarding the privacy of personal data.) In cases where the information directly concerns a single reservation, clause j) requires a system vendor to make it available on an equal basis to all the carriers involved in the service covered by the reservation, and to the subscriber concerned (the travel agent who made the reservation and who may need access to it, for example, to make a correction or to generate a ticket) but to no other parties without the written consent of such carrier(s) and the air transport user.

In practice this may be difficult for most States to verify. Although some States have relied on preventive measures requiring changes in the configuration of CRSs and a subsequent audit, others have preferred to deal with failures to comply on a case by case basis. Where States have reason to believe there is a problem, an audit can serve to resolve doubts about compliance with the requirement to limit access to booking data, but overuse of the audit procedure could result in increased costs without any corresponding benefits.

Aggregated data [clause k)]. In cases where the information is compiled in an aggregated or anonymous form (for example to provide a marketing database), this clause requires that a system vendor not discriminate among participating carriers in making it available: if it is made available to one participating carrier, it must be made available to all of them. The requirement that such data be in aggregate or anonymous form also recognizes the general obligation of system vendors not to make available to other participating air carriers information which is confidential or proprietary to a participating air carrier. The exception for financial data relating to operations of the CRS itself takes into account that a system vendor's financial results may be regarded as proprietary by the air carrier or carriers which own it.

Article 6 — Obligations of System Vendors to Subscribers Regarding Commercial Arrangements

Discrimination among subscribers [clause a)]. This clause requires that a system vendor not discriminate among subscribers in the CRS services it offers. In this context, "CRS services" include any enhancements, that is any improved or additional service which may become available.

Exclusivity [clause b)]. The purpose of this clause is to prevent a system vendor from restricting access by subscribers to other CRSs. Such restrictions could include a system vendor requiring a subscriber to use its CRS exclusively or for a certain sales volume (for example, at least X reservations per year) or for a certain proportion of their sales activities (for example, at least 75 per cent of reservations). Another example would be a system vendor insisting that a certain number or proportion of the CRS terminals used by a subscriber be linked to the vendor's CRS.

Carrier-linked arrangements [clauses c), d) and e)]. These three clauses are similar in that they all seek to prevent a system vendor from attempting to influence a subscriber's selection or usage of its CRS by introducing considerations related to the identity of the air carriers whose air transport services are sold by the subscriber. In this connexion, it is important to bear in mind that many system vendors are themselves air carriers or are affiliated to air carriers.

Clause c) seeks to prevent a system vendor from offering lower prices for its CRS services to subscribers which are prepared to promote certain carriers than it offers to other subscribers. Clause d) seeks to prevent a system vendor from insisting that a subscriber use its CRS when selling the air transport services of any particular carrier. Clause e) seeks to prevent a system vendor from arranging for any carrier to offer special commercial arrangements (such as higher commission payments) to subscribers which select or use the vendor's CRS.

Choice of hardware and software [clause f)]. Terminal equipment acts as an interface between a subscriber and a CRS. The simplest terminals consist of a keyboard and a screen, while more sophisticated ones are based on personal computers into which a subscriber can introduce its own software.

Concerns have been expressed about cases where system vendors have insisted that subscribers may only use the terminal equipment which the system vendor provides, thus giving the vendor a captive market for these products. In order to address these concerns, this clause prohibits a system vendor from insisting that subscribers use only its terminal equipment.

There is also communications equipment available which, with appropriate software, can enable a subscriber to link up with more than one CRS, thus providing access to additional information and making the subscriber less reliant on a particular CRS. The clause therefore also prohibits a system vendor from preventing the use of such equipment.

The system vendor retains the right to require that equipment and software used by the subscriber be technically compatible with its CRS. However, since "compatibility" may be open to different interpretations, States may need to ensure that system vendors do not abuse this requirement.

Form of Contract [clause g)]. In order to recoup the substantial costs involved in developing and operating a CRS, it is in a system vendor's interest to ensure that subscribers are tied for as long as possible to using that CRS. In some States there have been cases where system vendors have included allegedly unreasonable and unfair provisions in their contracts with subscribers, in order to achieve this objective. Examples of such provisions include a very long contract duration, so-called "roll-over" provisions that undermine contract termination provisions (such as restarting the contract period when an additional item of hardware or software is provided) and substantial penalties for withdrawal from contracts, including unrealistic provisions for liquidated damages. Although problems of this kind are unlikely where there is competition between and among CRS vendors and in instances where subscribers own their terminal and related computer equipment, some regulators have found it necessary to introduce specific regulations to address them, either by fixing a maximum length for a contract or by requiring a cancellation clause. The specific limits in the first two elements have been chosen with a view to including existing applicable national regulations and multilateral codes. The use of "contracts" in the plural recognizes that a system vendor may have more than one contract with a subscriber. For example, there could be a participation contract with a cancellation clause and an equipment contract which does not exceed five years. (The longer period of the equipment contract is intended to permit the recovery of the actual costs.)

Article 7 — Obligations of System Vendors Regarding Displays

Availability of principal display [clause a)]. The elements in the principal display have been selected with a view to ensuring air carriers have a fair opportunity to market their services, subscribers have an efficient and effective means of serving their clients, and air transport users have as extensive and unbiased a choice of air transport options as possible. The comprehensive requirement refers to including all relevant information in the principal display concerned (of schedules or tariffs, for example); it does not refer to the extent of coverage of a CRS in terms of the number of air carriers whose information is contained in it.

The two part test of neutrality provides both two specific criteria and one general rule. The first specific criterion that the display should not be influenced (directly or indirectly) by the identity of participating carriers means it should treat all participating carriers on an equal and nondiscriminatory basis. The requirement for nondiscriminatory treatment does not include non-participating air carriers because participation in a CRS is open to all carriers and, if a carrier is not willing to pay the requisite fees to become a participating carrier, a system vendor should not be obliged to include information regarding that carrier in any neutral display (or in any neutral manner in that display). It is nevertheless recognized that some system vendors may choose to include such information. Apart from requiring a system vendor to clearly indicate when principal displays omit certain types of information on non-participating carriers (clause g), sub-clause ii) of Article 7), the Code does not include specific provisions regarding the display of information of non-participating carriers. For example, it is silent on whether information on all such carriers in the market must be displayed if information on any one is displayed. However, this does not preclude States that wish to regulate this matter from doing so.

The second specific criterion is that the display may not be influenced by airport identity. This includes not discriminating on the basis of the airport served when a city is requested as the origin or destination. The IATA description of Metropolitan Urban Areas may be useful in determining which airports are normally associated with a particular city. However, other definitions are possible; what is important is that whatever set of airports is chosen for a particular city, that set is used consistently in all principal displays. The requirement for neutrality in terms of airport identity could become increasingly important as competition among airports increases. Moreover, if a principal display of services for a city-pair were allowed to be influenced by a particular airport, this could favour certain participating carriers.

The general rule requiring the consistent application of the ordering of information in a principal display is designed to prevent, for example, the use of different criteria in different markets which could favour the services of some air carriers over others. This requirement for consistency applies within a single principal display. Different principal displays need not use the same nondiscriminatory criterion and given the variation in preferences of air transport users, different criteria should be expected.

Functionality of principal displays [clause b)]. The requirement that principal displays be as easy to use as other displays provided is intended to encourage their use, particularly with respect to clause c), as explained below.

Use of principal displays [clause c)]. This clause seeks to ensure that vendors always provide a principal display unless there is a request by an air transport user which requires the use of a specific display, such as that of a named air carrier's schedules, space availability or tariffs. In this regard, all default displays are to meet the criteria for a principal display. This clause should be read in conjunction with Article 10, clause a) which requires that a subscriber may only use another display in order to meet a non-objective preference (such as a specific air carrier or air carriers or a specific airport) indicated by an air transport user.

Objective criteria [clause d)]. Whereas in a printed timetable publishers are usually able to present the various service options between any two points on a single page, the CRS terminals currently in use permit only a limited number of service options to be shown on the first screen of a display. Where pressures of time and limited resources prevail, subscribers have a tendency to book one of the first service options displayed which meets the passenger's known requirements. As a result, the order in which a system vendor lists service options can influence the probability of reservations being made for each one, with significant commercial consequences for the carriers involved.

Consequently, system vendors have developed various methodologies (sometimes referred to as "algorithms") which attempt to list service options in an order which they believe will most adequately reflect the preferences of air transport users. While some of these methodologies are comparatively simple, others are complex and take many different factors into account. For example, some methodologies are based on a system whereby service options are assigned "penalty points" according to certain criteria and those service options with the fewest penalty points are listed first. Under such a system, service options attract penalty points if, for example, they do not depart at the requested time, require excessive travel time, involve a connexion or stops en-route, or involve interlining.

In order to guard against the possibility that a system vendor might use a methodology which systematically gives greater or lesser priority to a particular carrier or group of carriers, this clause requires that the ordering of services in a principal display of schedules, information be based on objective criteria and some examples of such criteria are listed. This requirement also applies to the selection and construction of connecting services.

Displays of flight options [clause e)]. Based on experience and regulatory actions at the national and international level, system vendors have developed methods of ordering travel options (flights or combinations thereof) designed to respond to different demands of air transport users. The order of ranking in sub-clause i) is that prescribed by the EC and ECAC CRS Codes and is based on the assumption that air transport users will usually prefer a non-stop flight over a direct one, and both over a connecting service which requires a change of aircraft, and that service patterns of air carriers will tend to reflect this preference. This EC/ECAC display is widely available in CRSs in most areas of the world. However, air transport users have other preferences and air carrier service patterns also vary widely. Consequently sub-clause ii) recognizes that other rankings of flight options which also meet the criteria of this Article may respond to such preferences or to markets with different characteristics and are therefore permissible. However, special care must be taken so that flight displays based on Article 7 e) ii) are fair and nondiscriminatory Finally sub-clause iii) allows (but does not require) system vendors to provide both a principal display based on the EC/ECAC criteria and any other principal display meeting the criteria in Article 7.

The displays of flight options described in this provision are limited to subscribers in recognition of the fact that because of their extent and complexity, they are unlikely to be useful if provided directly to air transport users. However, the other provisions of this Article concerning displays would apply to displays provided to air transport users, and to third parties other than subscribers. For example, clause c) of Article 7 is relevant in this regard in terms of when principal displays are to be provided and when other displays are to be provided, both to air transport users and to third parties.

Unfair advantage [clause f]. This clause requires a system vendor to take care that, in the ordering of services in a principal display, no carrier obtains an unfair advantage. In that regard, system vendors need to be aware of two situations. First, where all single aircraft flights (sometimes referred to as direct flights) which do not require a passenger to change from one aircraft to another are displayed before connecting services which do require such a change, some air carriers may seek to obtain the highest screen placement possible for their services by using a single flight number for two separate flights which are scheduled to have a change of aircraft en route (sometimes referred to as "phantom" flights). Such flights are to be considered as connecting flights and displayed as such, not only to avoid any unfair advantage to the air carrier concerned, but also to avoid any misrepresentation to air transport users. Second, where system vendors use methodologies which differentiate between on-line connexions and interline connexions, either by displaying on-line connexions before interline connexions or by ranking service options on the basis of formulae which favour on-line connexions over interline connexions, any on-line preference is to be based on objective factors (such as elapsed journey time) and applied consistently.

Content of principal displays [clause g)]. Any principal display of schedule information must contain the elements listed in the two sub-clauses. Sub-clause i) is designed to provide the air transport user directly or via a subscriber, with the information which is probably of general concern or interest, such as when a change of aircraft is required, if a flight is nonscheduled or which air carrier is the operator where a codeshared flight is involved. (A codeshared flight is one which "shares" the designation code of two or more air carriers, by listing the same flight or combination of flights separately under each air carrier's code. For example, if air carrier A has an agreement to codeshare with air carrier B on a flight from X city to Y city, that flight could be displayed twice, once as A123 between X and Y and once as B456 between X and Y, even though there is only a single flight operated by one of the two air carriers. The display of codeshared flights is dealt with in Article 7 k).)

In order that air transport users can be aware of a lack of comprehensive information, sub-clause ii) requires that if a principal display omits some direct services, this should be clearly indicated. This requirement does not apply to connecting services, because system vendors are not expected to include all possible combinations (as explained in the notes on clause h) of this Article). There are two different sets of circumstances where sub-clause ii) is relevant.

First, information on the direct services of participating carriers may be incomplete for technical reasons. Until the situation is rectified, an air transport user needs to be warned that the displayed information is incomplete. Second, an air transport user also needs to be warned when information on some or all direct services offered by non-participating carriers that are known to exist is omitted by a system vendor. The expression "are known to exist" recognizes that the Code does not require a system vendor, for example, to display the complete schedules of non-participating air carriers as well as the possibility that a vendor may not be aware of the existence of certain services.

The requirement "clearly indicate" with respect to incomplete information is not intended to require a notice on every screen; a notice on the first screen should suffice.

Connecting points [clause h)]. In order to guard against the possibility that a system vendor might deliberately select or omit connecting points that are served by a particular carrier, this clause requires the use of as many alternative (single or multiple) connecting points selected on a nondiscriminatory basis as is necessary to ensure a wide range of options. The expression "as is necessary" has been included because the number of alternative connecting points required may vary from one market to another, depending upon such factors as the distance involved and the characteristics of carriers' route networks. The term "a wide range of options" is not intended to imply a requirement to include impractical alternative routings. In fact, in some short-haul markets with very frequent nonstop service it may not be reasonable, from a passenger perspective, to select any connecting points. Nevertheless, this does not prevent any regulatory body from defining a specific minimum number of alternative connecting points to be used in all cases, if it so wishes. This approach has been adopted in Canada, the United States and the EC and ECAC CRS Codes.

Accuracy of information displayed [clause i)]. Although responsibility for the accuracy of information it provides to a system vendor rests with the air carrier (Article 9 a)), the system vendor is expected to exercise due diligence that the information provided is displayed accurately and without misleading the air transport user. The criteria used for this purpose are that a system vendor not intentionally or negligently display inaccurate or misleading information, for example, by failing to include in displays certain information it has received from participating carriers.

Compliance by subscribers [clause j)]. As explained in the notes on Article 4, clause a), some regulatory bodies may have limited enforcement capabilities, particularly as regards subscribers and their compliance with the Code's obligations (Article 10). In cases where States do not find it practicable directly to ensure compliance with Article 10, the present clause calls on the system vendor to include appropriate provisions regarding such compliance in its contract with each subscriber. The intent is to avoid any discrimination with respect to subscribers in different jurisdictions by having all subscribers subject to the same obligations regardless of their location.

Display of codeshared flights [clause k)] The injunction against displaying the same flight or combination of flights more than a maximum of three times is aimed at codeshared flights. (An explanation of a codeshared flight is contained in the Notes to Article 7 g) i)). Displaying codeshared flights more than three times can result in the undesirable practice of "screen padding" (where the excessive listing of the same travel option pushes other travel options to succeeding screens, requiring additional time and effort on the part of the subscriber or air transport user to view all the travel options for a particular city-pair). However, limiting the number of times the same code-shared flight may be displayed means that in some circumstances a carrier participating in a codeshare will not have that service displayed in a CRS under its own designator code, unlike other air carriers involved in the same codeshared service where it appears under their designator codes. Although allowing each air carrier involved in a codesharing arrangement to display the service with its own designator code would eliminate the discriminatory aspect of the limitation, it could also encourage an undesirable level of screen padding.

The maximum of three carriers will accommodate almost all codesharing arrangements. However, where screen padding is deemed a particular problem, a lower limit can be used. Most codesharing arrangements involve two carriers and the EU/ECAC Codes of Conduct limit the display of code-shared flights with the same flight or combination of flights to a maximum of two. To accommodate this limit in cases where more than two air carriers participate in a codeshared service, the IATA Travel Option Selection Process may be used.

Article 8 — Other Obligations of System Vendors

Practices which inhibit or impair competition [clause b)]. This clause requires system vendors not to engage in practices which would reduce competition between and among system vendors or air carriers. It is stated in general terms in view of the fact that such practices would be subject to national competition laws and policies, which vary from State to State. Examples of practices which could inhibit or impair competition include, but are not limited to, collusion among vendors on pricing, entering into any agreement with other system vendors, regarding any aspect of CRS services, the objective or the effect of which would be to partition markets on a geographical or other basis.

Article 9 — Obligations of Air Carriers

Content of information provided to system vendors [clause b)]. Participating air carriers submit a substantial volume of information in electronic form to one or more system vendors and as the original source of that information are in the best position to ensure that it does not misrepresent services.

In terms of a misrepresentation of a service, so-called "phantom" flights (described in the notes to Article 7 f) are to be submitted in a manner that makes clear there is a change in aircraft.

In order that a system vendor can comply with Article 7 g) i) and a subscriber with Article 10 d) and e) the second sub-clause of this provision (ii) requires that an air carrier clearly identify in the information it provides on its air transport services certain items which the Code requires be provided to passengers, such as if a flight is nonscheduled or which air carrier is the operator where a codeshared flight is involved.

Refusal to participate in certain CRSs [clause c)]. Carriers sometimes choose not to participate in certain CRSs. In some cases this is because the carrier does not wish to distribute its products through a particular CRS for justifiable commercial reasons (for example, where the costs involved are considered to be too high). However, there have also been some cases where a carrier that is itself a system vendor (or is affiliated to one) has refused to participate in a competing CRS in order to make that CRS less attractive to subscribers. In markets where the carrier plays a major role, action of this kind is likely to have an adverse impact on the CRS options available to subscribers and ultimately on the quality of information made available to passengers.

This clause therefore seeks to prevent a carrier from refusing to participate in any CRS, but only applies in a State where the carrier holds a dominant market position and where it is financially linked or otherwise affiliated with any other CRS, such as a marketing agent. An exception is where the linkage or affiliation is a result of a participation agreement with the system vendor. In this context, participation is to be to the same extent and level of functionality as a dominant carrier's participation in its own CRS, including for example, providing all the information on schedules and booking, and allowing reservations, confirmation and ticketing on an equal, timely basis. The clause allows an exception in cases where legitimate commercial or technical reasons exist for not participating in a particular CRS; it is envisaged that such reasons would exist only in extremely rare and isolated cases.

Refusal to provide information to certain CRSs [clause d)]. Carriers sometimes choose not to provide information on their services to certain CRSs. For example, a non-participating carrier might choose not to provide any information to the CRS concerned because it is a competitor of a CRS with which the carrier has a financial link or affiliation. However, as in the case of refusal to participate in a CRS (see previous clause), this could have an adverse impact on competition between and among CRS vendors in terms of the CRS options available to subscribers and ultimately on the quality of information made available to air transport users. In cases of participating carriers, the information to be provided to system vendors (and conversely what may be withheld) will normally be governed by the participation contract between the vendor and the air carrier.

This clause therefore seeks to prevent a carrier from refusing to provide information on schedules or tariffs to a system vendor, but only applies in the carrier's State of domicile and only if it already provides such information to another system vendor whose CRS is used by subscribers in that State. The exception "except where permitted by law" is included to take into account legislation which permits such a refusal. Some States may also wish to extend the coverage of this clause to include information on space availability as well as schedules or tariffs.

The obligation in clause d) may place an unwanted burden on some carriers, particularly smaller ones. However, nothing in the Code prevents a carrier from charging system vendors in order to recoup any additional costs incurred in providing such information (which should not, however, be large because the information is limited to that already provided another system vendor). Moreover in many instances, system vendors may also be able to obtain schedule information, for example, from public sources.

Relationships with subscribers [clause e)]. The aim of this clause is to ensure that carriers do not attempt to intervene in a subscriber's selection or usage of a CRS and to prevent the two practices described therein from impairing competition between and among system vendors. It closely resembles two of the obligations of system vendors to subscribers (Article 6, clauses d) and e)). Sub-clause i) applies to air carriers which have a financial interest or are affiliated with (for example, by acting as an exclusive agent of) a particular CRS and which could give it an unfair competitive advantage over other CRSs by forcing or inducing subscribers to use only that CRS. To make this requirement nondiscriminatory, sub-clause ii) applies to air carriers which do not have a financial interest nor are otherwise affiliated with a particular CRS, but whose actions could unfairly favour that CRS over other CRSs. However, sub-clause ii) is not intended to prevent air carriers from requiring the use of a particular CRS for legitimate commercial reasons. For example, air carriers which only participate in one CRS could require or encourage subscribers to use that CRS and air carriers could favour use of a particular CRS because it offers better prices, services or functionality without unfairly favouring that CRS.

Article 10 — Obligations of Subscribers

With the help of appropriate software, those subscribers wishing to do so can take the data available from a CRS (or more than one CRS) and reassemble it into a display format that they themselves have designed. While this can benefit passengers, allowing displays to be tailored to their specific needs, there is also a danger that subscribers will reassemble data in order to meet their own commercial objectives. Clause b), while recognizing that subscribers may wish to manipulate information supplied by a CRS, seeks to avoid this being done in any way that produces inaccurate or misleading information for air transport users. It too may be very difficult to enforce in practice.

Accuracy of Information [clause c)]. This clause requires a subscriber to be responsible for the accuracy of any information it enters into a CRS, such as data relating to a passenger or a passenger's requirements. However, at least some of this information is likely to have been provided to the subscriber by the passenger and, in these circumstances, subscribers would usually be in a position to hold passengers responsible for the information's accuracy.

Informing air transport users [clauses d) and e)]. Where nonscheduled flights are included in a CRS, subscribers are responsible for informing air transport users if a flight is nonscheduled and of any special requirements concerning nonscheduled flights, such as the purchase of other services, or that matters concerning the air transport arrangements are to be taken up with the appropriate tour operator, for example, rather than the air carrier operating the flight (clause d)). The responsibility of a subscriber to inform passengers and prospective passengers of the information in clause e) has a counterpart in the responsibilities of air carriers and system vendors to clearly identify it in, respectively, the information provided and displayed. This responsibility is particularly important with respect to codeshared flights; subscribers are required to inform air transport users whether an itinerary includes a codeshared flight as well as the name of the operator of a codeshared flight.

Prohibited reservations [clause f)]. For the purposes of this Code, a fictitious reservation is one which is not made at the request of a consumer, for example, where reservations are made for training purposes using names selected at random. Although fictitious reservations can be made via several channels (directly with the air carrier, by third parties, etc.) this clause prohibits such reservations when they are made through CRSs, because they can cause two problems. First such reservations can give a false indication of the actual demand for a service, making it difficult to equate capacity with demand for specific flights. Second, because vendors charge air carriers for reservations, they can result in additional costs to the air carrier concerned. The Code does not equate fictitious and duplicate reservations (although the latter can cause similar problems) because of a lack of industry and regulatory consensus with respect to the permissibility of duplicate reservations. However, both fictitious and duplicate reservations which air carriers do not wish to be made can be reduced by: air carrier auditing of bills for reservation fees; developments in computer technology which prevent certain duplicate reservations from being made through the same CRS; the use of software programs rather than actual CRSs for subscriber training; and tighter controls on incentive programs requiring subscribers to meet reservation targets (an alleged reason for some fictitious reservations).

Article 11 — Safeguarding the Privacy of Personal Data

The safeguarding of personal data is dealt with in a separate Article in this Code because of its importance and because all those involved States, air carriers, system vendors, subscribers and other parties involved in international air transportation share responsibility for ensuring that such data is safeguarded when in their control.

Appropriate measures [clause a)]. There are extensive legal and regulatory measures (both national and international) concerning the safeguarding of personal data. States will draw from these sources in determining what should be applicable to CRS operations in their respective territories. These measures may include, where justification exists, the use of sanctions where the privacy of personal data is not maintained.

One test of what constitutes "personal data" is whether it can be related to an identifiable individual. However, no precise definition of what constitutes "personal data" is provided here for this too may vary among States in terms of national and international law and practices.

In terms of practices in the air transport industry States may wish to take guidance from IATA's Recommended Practice 1774 ("Protection of Privacy and Transborder Data Flows of Personal Data used in International Air Transport of Passengers and Cargo").

Parties involved, consent of passenger [clause b)]. In order to make a reservation through a CRS, a subscriber needs to enter into the CRS some personal data regarding the passenger. This could include age, nationality, religious dietary requirements and other information needed by the carrier concerned, which, in the wrong hands, could endanger the well-being or property of the passenger. Thus all parties involved must safeguard the privacy of such personal data. "All parties" in this context primarily means system vendors (which have a specific responsibility with respect to single booking information in Article 5 j)), air carriers and subscribers, but also refers to other parties that may have access to personal data, such as companies which prepare data for entry into CRSs, or which process billing information.

The requirement that personal data not be released without the consent of the passenger concerned is a general principle to be applied in a reasonable manner, rather than an inflexible rule. For example, in providing personal data to a subscriber for the purpose of making a reservation or purchasing a ticket for air transportation, a passenger user may be regarded as implicitly approving the transfer of the data to other parties which require access to it to complete this transaction. Thus, settlement banks do not require the specific consent of passengers to process payments which might contain personal data, nor would a company processing billing information for an individual air carrier. Similarly parties involved in the air transportation would include, for example, airport authorities who may be requested to provide a wheelchair for a passenger.

Article 12 — Application, Revision and Exceptions

As noted in the Introduction, the marketing of air transport services through CRSs is a rapidly changing aspect of the air transport industry. Consequently the Code needs to be revised when circumstances warrant to take account of new developments. For simplicity and so that only one Code will be applicable at any one time, any revised Code adopted by the Council will replace the previous Code in its entirety.

Following the Code [(clause b)] States which commit themselves to follow the Code are to notify ICAO of that fact. This unilateral declaration of intention, communicated to and (pursuant to clause e)) disseminated by ICAO serves to inform other States and all interested parties of this decision. However, any State which has notified ICAO that it follows the Code may end that commitment by informing ICAO and this decision will also be disseminated by ICAO. States may, of course, commit themselves to follow the Code in other ways, through international agreements and arrangements with other States bilaterally or multilaterally, or through constant and uniform practice in applying it.

The term "following the Code" means that a State endeavours to apply the general principles of behaviour in the Code in its regulation of CRSs or follows policies or applies rules which are consistent with the Code, within its territory and in its relations with other States which also follow the Code. How States do this will vary widely in practice. Some may rely directly on the Code; others may have more detailed national or regional regulations on CRS; some may have CRS provisions in bilateral or multilateral agreements which must be taken into account in applying the Code.

Exceptions for developing countries [clause c)]. CRSs originated in certain developed countries, notably the United States and various States in Europe. Although the use of CRSs has now spread throughout the world, some developing countries may wish to delay the entry of CRSs to their territories until, for example, there is an adequate and appropriate regulatory structure or product distribution system in their own national markets. The Code therefore provides that such States may decline to follow Article 4 c) until 31 December 2000, provided the conditions explained below are met. It is clear that many developing countries have no interest or intention of using this exception; however, there is no effective manner of deciding a priori which developing States may wish to avail themselves of the exception; so a procedure based on individual choice is preferable.

The first condition (i) is that a State taking an exception to Article 4 c) notify ICAO accordingly. The second condition (ii) requires that the exclusion of CRSs be consistent with any bilateral or multilateral agreement or arrangement to which the State taking the exception is a party. This is intended to ensure consistency between a State's obligations under this Code and any other CRS obligations it may have, for example, with respect to bilateral air service agreements and to the General Agreement on Trade in Services (GATS).

Exceptions for lack of reciprocity or dispute [clause d)]. Another exception with respect to a State following the Code can arise in the event of a lack of CRS reciprocity or a failure to resolve an intergovernmental dispute concerning CRS, as provided for in Article 4 g). To ensure full transparency with respect to the application of the Code, a State which allows or requires an action or actions not in conformity with the Code is required to notify ICAO of the action or actions and should include sufficient information concerning the vendors, air carriers, and States involved to indicate the extent and nature of the effects of such actions.

Transparency [clause e)]. In order that all States may be kept informed concerning those States which are not following the Code, in whole or in part, in any of the situations described in clauses b) through d) of this Article, the ICAO Council will issue periodic reports concerning notifications received. It is anticipated that the first such report would be made shortly after the effective date of the Code as States make their initial decision on whether or not they are prepared to follow it. Subsequent reports will be issued when and as required.

Exemptions [clause f)]. As explained in the Notes to Article 2 above, by their nature multi-access CRSs cannot comply with certain obligations of a system vendor in the Code, and are therefore exempted from the requirements in Article 5 which deal with loading, manipulating, and making available certain information and the requirements concerning arrangement and the provision of principal displays required in Article 7. Such systems are subject to the other provisions of the Code so that all CRSs, to the extent possible, will be subject to the same obligations and requirements.

By their nature, multi-access systems discriminate in favour of the dominant carrier(s) in the market concerned. However, this discrimination can be remedied in two ways. First, by having other CRSs which provide objective displays in the same markets served by the multi-access system. Second, by States taking action under the provisions of Article 4 g) to counteract the discriminatory aspect of multi-access systems where these States determine that there is a lack of CRS reciprocity.

1. These two alternative Model Clauses are designed to be used by States at their discretion in their bilateral or multilateral agreements to reinforce or supplement the ICAO Code of Conduct for the Regulation and Operation of Computer Reservation Systems as well as to take into account the existence of national and regional CRS regulations which in certain respects may go beyond the Code.
   
   
2. With respect to agreements in which none of the Parties has, or expects to have national or regional CRS regulations the following Model Clause A applies:

1. Each Party shall apply the ICAO Code of Conduct for the Regulation and Operation of Computer Reservation Systems within its territory.
   
   
2. With respect to agreements in which one or more of the Parties has, or expects to have, national or regional CRS regulations, the following Model Clause B applies: