October 20 - Industry Analysis Regarding PaxIS Court Ruling

Industry Analysis

October 20, 2009

The International Air Transport Association (IATA) today announced that it “won a major court victory” in a dispute with global distribution system (GDS) Travelport over PaxIS, IATA’s Passenger Intelligence Services product. While BTC does not yet have the decision to review in detail, it would appear from publically available information that Travelport did not lose a case on the merits, but rather an early procedural request of the court for an injunction, in lieu of a trial. Such an injunction to enjoin a commercial party’s marketplace activities must ordinarily meet very high standards such as timeliness in seeking a court’s intervention. The PaxIS product has been in the marketplace for three or more years.

In contrast to this procedural loss for Travelport, Amadeus won its case against IATA earlier this year on the merits when the International Chamber of Commerce Court of Arbitration ruled in favor of the GDS and ordered IATA to cease and desist using Amadeus’ data in its PaxIS product. Amadeus won resounding victories on two arbitrated claims.The first successful claim related to IATA’s breach of a commercial confidentiality agreement governing the transmission of Amadeus’ billing and settlement plan (BSP) information to BSP data processing centers. The arbitrator also ruled that IATA’s use of Amadeus BSP data for PaxIS violated the EU Database Directive. Sabre’s suit against IATA, expected to go to trial in early 2010 in Canada, will likewise be argued on the merits.

The IATA PaxIS product is an especially intrusive and troubling data product because unlike any other data product, PaxIS shows the average price of tickets sold on specific routes on airline competitors by specific travel agents. Because of the International Chamber of Commerce Court of Arbitration ruling in the IATA – Amadeus case, the practical effect of the Travelport ruling is that PaxIS remains an incomplete product offering; analogous to a phone book with half its pages torn out.

BTC will provide more analysis as information becomes available.

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