A recent ruling by the Ontario Superior Court of Justice prompted Canada's Association of Retail Travel Agents (ARTA Canada) to side with IATA and its member/owner carriers in a court victory certain to further reduce GDS controls over the airline industry, said ARTA Canada President Bruce Bishins. The decision could have a global impact on agents and GDSs.
At issue is the court's denial of Sabre's claim that IATA breached confidentiality in using GDS data in selling sales information to airlines based on booking details which originated in the Sabre GDS, according to Bishins. Sabre claimed that IATA had no right to use such data in its own version (PaxIS - Passenger Intelligence Service) of similar GDS-derived data (MIDT - Marketing Information Data Tapes), even though IATA claims that its PaxIS product obtains its data from ticketing and payment information transacted through its various BSP data processing centers.
The court decided that Sabre did not prove its breach of confidentiality case against IATA. It is widely believed that PaxIS data sold by IATA is significantly less expensive than MIDT data sold by the GDSs, Bishins said.
The decision to deny Sabre its claim follows another decision, by a Dutch court in 2009, to uphold IATA's right to deploy PaxIS despite similar claims by Travelport against IATA, ARTA Canada said.
Even earlier, Sabre had sued U.S. area settlement plan operator Airlines Reporting Corporation (ARC) on similar grounds, however, a settlement was reached between the parties, one of which was ordered to be confidentially disclosed in the Sabre/IATA case, according to Bishins.
"While this legal matter has been ongoing for several years, the decision by the Ontario Court yesterday is further evidence that the airline industry is looking at every GDS program and service in an effort to find more cost-effective alternatives in the airline distribution landscape," Bishins said. "ARTA Canada has never been a fan of either MIDT or PaxIS, feeling that both services allow airlines to pit one travel agent against groups of others in marketshare performance. With so many alternatives to book an airline outside of the typical GDS/BSP environment, ARTA Canada maintains that marketshare data has become less and less reliable and that airlines should emphasize revenue growth as the key performance indicator."
With this decision in hand, IATA could be more comfortable expanding its ticket sales data information services to airlines. The loss of MIDT income to GDSs, caused by many airlines shifting to PaxIS, should not be ignored, Bishins said.
"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 - 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", added Bishins.