12 December 2022, etc.venues Monument, London
Business Travel Show Europe, presented by The BTN
21 November, London Hilton Metropole
At the recent annual conference of the UK and Ireland Institute of Travel Management (ITM) in Dublin, two of the speakers both saved some of their most vehement remarks for the Passenger Intelligence Services (PaxIS).
This is a scheme introduced by the International Air Transport Association (IATA) which has clearly angered many sectors of the industry.
In Dublin, Mike Platt, industry affairs director of Hogg Robinson Group (HRG) warned that under this scheme, IATA "will sell your data to anyone who wants to buy. This is detailed information about you."
Kevin Mitchell, chairman of the Business Travel Coalition (BTC) said it will "have an absolutely chilling effect on corporate discounts and it will have to be stopped."
HRG has lodged a complaint about PaxIS with the EC. At least two other major players in the industry have also filed complaints to the Commission.
IATA, an airline cartel, describes its "product" more temperately than others in the industry. PaxIS is a "powerful and essential market intelligence tool for air travel analysis."It goes on: "It is the most comprehensive airline passenger market intelligence database available today, with more accurate, reliable and affordable data captured through IATA Billing and Settlement Plan."
It can provide information on the agency, the country and the region of ticket issue, the point of origin airport, the connecting airport, the final airport, fare category, fare value, month of ticket issue and month of travel.
It is certainly a crucial step on from the Marketing Information Data (MIDT) arrangements, whereby GDSs sell information on airline bookings to interested parties. With PaxIS, what IATA is selling is details of flights actually taken and the fares paid. In an industry where bookings frequently chop and change, this is far more vital information.Mr Platt said the arrival of PaxIS will make MIDT and its level of data "obsolete."
"MIDT is basically booking data. The GDSs were selling this information to interested parties to see how much business of a corporate was going to a competitor and how much it was getting on particular routes.
"The information under MIDT was vaguely accurate but interesting.
"But PaxIS is a totally different feature. IATA can sell information not only on bookings but the exact information on flights. But it is not just details of flights but also how much has been paid.”
He said if one airline was selling flights to Boston for £600 and another for £500, the second could raise its price to £550 and still undercut its rival.
Mr Platt said that larger companies also had their own IATA number which could indicate just what price they were paying for a flight from A to B. In other words some details of their corporate details could be calculated from information provided by PaxIS.
"We are talking about highly sensitive financial data. Agencies try to get the best deals for their customers but airlines will be able to calculate that sort of information and see what price others are offering.
"The type of information that IATA wants to sell is incredibly client confidential."
The point is echoed by the BTC. In a background briefing on PaxIS, it says it makes "unpublished discounting at particular travel agencies highly visible." That is it exposes which agencies are doing the best deals for their customers.
BTC goes on to claim that if airlines also know what their rivals are charging, "the incentive to compete on price is materially reduced.”
It adds: "In other words PaxIS materially undermines any incentives to compete on price at the agency or corporation level."
BTC also criticises the fact that PaxIS gives out actual ticket prices. "The fundamental problem with PaxIS is that, unlike any data product the GDSs have ever made available to airlines, it allows airlines to see, for specific travel agency locations, the actual fares collected by that agency for even individual tickets issued on the flights of identifiable (in fact all) competitors on particular routes for specific classes of services.
"As such, it makes pricing totally transparent for direct competitors."
The ITM is another organisation which is concerned about PaxIS. Its executive director Paul Tilstone told BTE their concerns were on the impact it might have on airline behaviour and on that of procurement professionals.
"We wonder whether the development is actually anti-competitive and we will be seeking guidance on whether this is an approach that we should take on a European level.
"We are concerned about the impact this will have on the nature and behaviour of procurement professionals whose job it is to negotiate on behalf of their corporations rates with the airlines when the airlines have the information on their competitors rates with that corporation," he said.
Mr Tilstone said they were monitoring the situation to see what action might need to be taken.
PaxIS also bears another IATA hallmark. The Association acted unilaterally before launching its new product. "They never consulted, they never talked to the corporates. They just did it," said Mr Platt.
"It has the potential to do a lot of damage in the short term. Do people actually want details of their deals broadcast to anyone who wants to buy them?"