4 Leading Airlines to Start Travel Web Site

Four of the five largest U.S. airlines said Tuesday that they will band together to start a travel Web site as they face growing competition from Internet companies offering low-priced air fares and other travel arrangements.

Continental Airlines Inc., Delta Air Lines Inc. , Northwest Airlines Corp. and UAL Corp.’s United Airlines are forming the online service, which they plan to open in the first half of 2000. Travelers would be able to book airline, hotel and rental car accommodations on the yet-to-be-named Web site.

In recent years, airlines have seen the advent of sites such as Travelocity and Microsoft Corp.’s Expedia, which allow consumers to quickly find the cheapest air fares, and of Priceline.com Inc., which lets travelers bid for tickets. Travelocity is operated by booking system operator Sabre Holdings Corp., which is 83% owned by American Airlines parent company AMR Corp. AMR is the only one of the five leading U.S. airlines not involved in founding the new site.

“The industry is being barraged with new Web sites appealing to the price-conscious traveler,” said Joseph Schwieterman, director of the Chadick Institute at DePaul University in Chicago and a former aviation competition specialist at United. “This could give them more control of how their product is presented on the Internet.”

On a day that saw a broad stock market sell-off, UAL shares closed down $3.25 at $64.56; Continental stock fell $1.25 to close at $40.13; Delta stock fell $1.69 to close at $50.31; and AMR shares fell $1.31 to close at $60, all on the New York Stock Exchange. Northwest stock fell 50 cents to close $24.38 on Nasdaq.

The airlines said the site will offer the most comprehensive selection of air fares and other travel information online. It is expected to publish fares from virtually all carriers worldwide, they said.

The four airlines will continue to independently operate and develop their respective Web sites.