BRUSSELS, Oct 2: The International Air Transport Association (IATA) must scrap its tariff-setting system for combined flights within the EU by January 2007 to comply with competition rules, the European Commission decided on Monday.

The commission said the system should be scrapped because the number of journeys covered by IATA pricing agreements are small in comparison to flights under other price-setting systems which do comply with competition rules.

“As a result, for routes within the EU there is insufficient assurance that the benefits for consumers will continue to outweigh the risks to the restriction of competition arising from the price agreements,” the commission said in a statement.

The tariff-setting system for combined flights had been exempt from competition rules since 1993 because the benefit of seamless flights across several destinations on one ticket was thought to outweigh the risk to competition.

The commission said the same system for flights between the EU and the US and Australia will continue to be exempt from competition rules until June 30, and between the EU and other non-EU countries until 31 October next year.

But IATA will need to give the commission more data if it wants those agreements to continue beyond their 2007 deadlines.—Reuters