The proposal by the EU to modify Regulation 261 does not in any way prevent the through marketing of fares and this kind of "catastrophic consequences" of minor regulation is typical of the airlines response to regulation. When 261 was initially implemented, the airline associations (both the European Low Cost Airline Association and the legacy carriers) argued that there would be bankruptcies caused by the regulation and that fares would increase dramatically. Neither happened. It is hysterical nonsense.
The reason airlines prevent this type of change is to protect their bizarre and byzantyne pricing models. In reality, pricing of flights is ridiculously complex and not based on cost, but rather based on the need to feed giant hubs in which one or sometimes two airlines have effective monopolies. This is a problem in both Europe and the US and inhibits competition and the development of customer friendly point to point routes.
In order for Lufthansa to control the market in Germany via Frankfurt and Munich, they created two huge hubs and need to direct traffic via the hubs to the make the connecting flights viable. Likewise, Air France control Paris and Lyon, British Airways control Heathrow, and so the list goes on. In North America, there are dominant hubs throughout the continent which inhibit competition and effectively create a series of local monopolies. Delta in Atlanta, United at Newark, AA in Dallas, etc.
These hubs create bizarre pricing models in which a flight from say Toronto to Frankfurt (a high demand route), could cost more than a flight from Toronto to Oslo, via Frankfurt. In the past, passengers used this to their advantage, by booking through tickets and abandoning the second leg. This was the natural response of the market, but airlines don't like markets which work, as competition depresses pricing so they simply changed their Terms and Conditions to allow them to cancel the contract, so that their abusive pricing practices could continue.
Airlines are so abusive that there was a recent example where a passenger was travelling transatlantically on a Delta flight and their child was involved in serious car accident. When they arrived in London, enroute I think to Rome, they heard the news and immediately broke their journey and flew back. When the mother finally made it to Rome, she found her return ticket had been cancelled and that Delta were demanding a ridiculous fee to get her home. This despite, it was airline staff who had assisted her to get back home and she had booked additional flights with them to facilitate the journey home.
The decision of the airlines to abuse their passengers in this way is outrageous. To see tragedy as a revenue opportunity to be exploited in not unusual in the airline industry and the only way to prevent this is to regulate.
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