Legal Ruling To Halt IATA's PaxIS Use Of Amadeus Information

The future of the International Air Transport Association's deeply controversial PaxIS market intelligence product looks questionable after legal action forced the airline body to remove all bookings through Amadeus from the system.

Amadeus this week announced that an International Chamber of Commerce arbitration tribunal has found IATA's use of ticketing information transmitted by Amadeus in PaxIS constitutes a breach of contractual agreements. The tribunal also ruled that this infringes Amadeus' rights under the EU Database Directive. As a result, it has ordered IATA not to use any Amadeus-originating ticketing information in PaxIS or for any purpose other than operating billing and settlement plans.

"IATA intends to comply with the decision of the Arbitration Panel,” IATA said today in a statement. “We are currently reviewing this decision to evaluate its actual scope and impact and to determine the next steps to be taken."

A previous statement from Amadeus said, "IATA has confirmed that it will take all the necessary steps to exclude any Amadeus ticketing information from its PaxIS product with immediate effect." Amadeus accounts for 36 percent of all GDS air bookings worldwide, leaving the ability of PaxIS to inform airlines comprehensively about booking volumes by travel agents and, in some cases, corporate clients in doubt. This is especially the case as another global distribution system, Sabre, has a similar court case against IATA pending in Canada. "Given the outcome for Amadeus, we are pretty optimistic about our own case," said a spokeswoman for Sabre.

Amadeus in its statement said the use of its ticketing information in PaxIS "infringes Amadeus' rights." However, this is understood to be only part of the story behind the legal action taken by GDSs against IATA, with the real reason being that the GDSs resent IATA using their data to offer a service that they are barred from offering themselves.

This situation arose as a result of the revised European Commission Code of Conduct, which went into effect on March 29. The code forbids GDSs to include any information in so-called marketing information data tapes, which identify specific agencies or corporate customers. However, GDSs and European agency groups allege the code has not so far restrained IATA from selling similar information. "The GDSs believe they are all adhering to the code of conduct privacy rules, yet IATA seems to be an exception to it," said one source. "What is more, PaxIS is a lot more detailed."

The U.S.-based advocacy group Business Travel Coalition, which has campaigned against PaxIS, welcomed the arbitration. "In light of the immediate requirement for IATA to strip out Amadeus data from the PaxIS product to comply with EU law, rendering PaxIS commercially questionable, no reason remains for IATA to continue to refuse to comply with its obligations under the recently revised CRS Code of Conduct to mask the identify of travel agencies and corporate purchasers for data derived from any CRS," said BTC chairman Kevin Mitchell.