The International Air Transport Association claimed victory over Sabre in an Ontario court this month, but IATA's controversial booking database PaxIS, which was the subject of the dispute, faces another imminent threat. The European Travel Agents and Tour Operators Association told The Beat it expects the European Commission within two months to pronounce whether it will uphold ECTAA's 2009 claim that IATA fails to mask data in PaxIS identifying specific travel agents and potentially some corporate clients, thus infringing on the European Union CRS Code of Conduct. Business Travel Coalition chairman Kevin Mitchell said he too had been informed that an EC decision is imminent.
All three major global distribution system companies in the past two years have sued IATA over PaxIS. Amadeus was successful while Sabre and Travelport were not. "We are naturally disappointed with the decision in this case," according to a Sabre statement. "We respectfully disagree with the court's conclusion and are currently assessing our legal options."
A Sabre official confirmed that the judgment affects all markets in which bank settlement plans operate.
While the GDS firms have focused their legal actions on whether IATA had the right to use data from bookings originating in their distribution systems, travel agents have campaigned against PaxIS through European regulatory channels on the separate issue of data privacy.
Both agency and corporate client associations, such as the United Kingdom and Ireland's Institute of Travel & Meetings, have criticized PaxIS because it enables airlines to identify how much travel agents are spending on each route with each airline. Corporate clients potentially can be identified if their bookings are handled through an agency implant using a unique IATA number.
Agents and clients previously had been concerned about the same potential problem with the marketing and data information tapes (MIDT) sold by GDSs to airlines. MIDT is similar to PaxIS, but not identical. However, the amended EU CRS Code of Conduct introduced in March 2009 required the GDS firms to mask any data in MIDT that might identify individual agencies or clients unless they explicitly obtained the subject's consent to show the information.
The GDS companies complied, but IATA continued to identify IATA locations in PaxIS. A May 2009 letter from the European Commission to Brian Simpson, a member of the European Parliament, confirmed that it considered PaxIS to be covered by the code and therefore IATA should take steps to mask identities. ECTAA officials believe IATA did not comply, which led to its September 2009 complaint to the Commission. "IATA is infringing this regulation because it identifies agents with their name and their number without their agreement," said ECTAA legal adviser Isabelle Leroy. "The GDSs have asked agents if they could identify them in data, but IATA has never done that. There is an investigation. It has been a long one, but we are hoping to hear in the next couple of months.
"It is a shame that Sabre lost but its case was completely independent of our complaint because it was on a completely different basis," said Leroy, noting how regulations differ between Canada and Europe. She added that "PaxIS data is much more detailed than MIDT."
BTC's Mitchell agreed, alleging that "competing airlines can look at data to the level of granularity that they can say, 'Our competitor has been offering a 10 percent discount, whereas we have been offering 15 percent. Let's move our discount down.' Because of the historic way in which the GDS [firms] masked the identify of corporate travel departments, buyers at least had a degree of protection in MIDT. Now that protection is gone."
This month's court ruling in Canada stated that "the PaxIS product of IATA competes with the MIDT product of Sabre," but also offered a brief insight into how they differ. MIDT is based on booked data, the judgment said, whereas PaxIS is "based on ticketed data contained in data file transactions transmitted to the DPC [data processing center] as part of its BSP [billing and settlement plan] process." IATA, the judgment continued, "markets the PaxIS program as a replacement for MIDT at a lower cost."
In spite of the victory in Ontario, PaxIS has problems even without the impending European Commission complaint verdict. As a result of Amadeus winning its case in May 2009, when the International Chamber of Commerce arbitration tribunal ruled PaxIS breached contractual agreements, IATA no longer uses any Amadeus-originating ticketing information in PaxIS. How flawed PaxIS has become as a result of that ruling is a matter of debate. Since airlines can pair it with Amadeus' own MIDT product, Leroy considers PaxIS still to be a powerful and pernicious tool. However, U.K.-based Travel Technology Research owner Richard Clarke, who broadly believes airlines should be able to see unfettered booking information, said, "Without Amadeus data, PaxIS is somewhat useless." Losing Sabre data as well undoubtedly would have made PaxIS weaker, said Mitchell.
One other implication of the Ontario judgment for agents and their clients to consider is the financial impact on the GDS firms if they continue to lose marketing intelligence customers to IATA. The court ruling established that "Sabre has lost revenue to IATA, so detriment has been established."
This point has not escaped Bruce Bishins, president of Canadian agents' association ARTA Canada. "GDSs will be compelled to make up the revenue shortfall stemming from weaker MIDT sales, and we certainly don't want travel agencies to become the target of increased fees for GDS services," according to a Bishins statement. "All the more reason why ARTA Canada supports alternative booking platforms if GDSs cannot pare down their fee structures to become more cost-effective and attractive to airlines and other travel suppliers."
According to the Sabre statement on the Ontario court ruling, "While this is an important case for Sabre, the decision focuses solely on the very narrow question of whether IATA had the right to re-sell as part of its market intelligence products data that Sabre supplies to the BSPs for ticketing and ticket settlement purposes. The case and decision did not in any way address or affect airline-GDS relationships or the existing distribution model. This case has no impact on U.S.-based travel agencies as IATA does not include data from US. travel agents."
This article originally was published by The Beat