American Airlines Plans to Stop Displaying, Selling Tickets on Orbitz.com
Yesterday’s decision by an Illinois state court in Chicago lifted a temporary restraining order granted last month that prevented American from dropping Orbitz, according to the Fort Worth, Texas-based airline.
American has developed a system of its own called Direct Connect that provides fare pricing and options directly to larger online travel agencies. The carrier also is trying to drive more bookings through its own website at AA.com.
“In today’s competitive marketplace, it is important for American to be free to customize its product offerings to improve the customer experience, as well as distribute its products in a way that does not result in unnecessary costs,” Ryan Mikolasik, a spokesman for American Airlines, said in an e- mailed statement.
Allowing American Airlines to drop Orbitz marks the “first shot in a long battle that’s going to be engaged” by all airlines in 2011, said Kevin Mitchell, chairman of the Business Travel Coalition, a group that represents corporate travel managers and is critical of American’s plans.
“When American pulls inventory from Orbitz, consumers will not have the ability to compare all apples to apples” on fare pricing, Mitchell said in a phone interview.
Sabre Holdings Corp., the parent of Travelocity.com, said in a statement that American’s actions will “make it much harder and more costly for agents and consumers to easily comparison shop among airlines, which will result in increased prices for consumers.”
The Circuit Court of Cook County denied a request for a preliminary injunction by Travelport LP, the travel-reservation systems provider whose affiliates partly own Orbitz, said Brian Hoyt, a spokesman for Orbitz, in an e-mail yesterday.
Revenue earned on American Airlines tickets and associated products such as rental cars accounted for about 5 percent of Orbitz’s revenue for the nine months ended in September, Hoyt said. Most of the affected ticket volume will be replaced by other suppliers, he said.
American is pushing online travel agencies to obtain flight and fare information directly from it instead of through global distribution systems such as Travelport’s Galileo and Worldspan, Orbitz Chief Executive Officer Barney Harford said in November in a conference call with analysts.
Travelport said in a separate statement that it’s “disappointed” with the court’s ruling on the restraining order and that the case will continue until a final judgment is made.
“Travelport believes American Airlines’ plans to force a more restrictive distribution model will result in inefficiencies and added costs and will be detrimental to airline customers, travel agencies and consumers,” Jill Brenner, a spokeswoman for Travelport, said in the statement.
Two lawyers for Travelport, Paul Chronis and John Schriver, didn’t immediately return calls and e-mails seeking comment.
Separately yesterday, Delta Air Lines Inc. said it notified three online travel sites, CheapOAir.com, OneTravel.com and BookIt.com, that it terminated them as authorized travel agents as of Dec. 17. Tickets purchased from those websites through Dec. 17 will be honored, Delta spokesman Trebor Banstetter said.
Delta is trying to increase bookings through its own website at Delta.com, Glen Hauenstein, executive vice president of network planning and revenue management, said on a Dec. 15 webcast of an investor presentation.
Travelport is owned by Blackstone Group LP.
The case is Travelport v. American Airlines, 10CH48028, Circuit Court of Cook County, Chancery Division (Chicago).
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