American Airlines pulls flight listings from Orbitz
Orbitz Worldwide Inc. stopped selling American Airlines’ tickets Tuesday after a judge in Chicago allowed the nation’s No. 3 airline to yank all content from the online travel giant.
American said it pulled its inventory from Orbitz immediately after the Cook County Circuit Court ruling. Customers who need to change tickets booked online through Orbitz should call (800) 433-7300, the airline advised.
The Texas airline had sought to sever ties to the Chicago online travel agency Dec. 1 as a result of a contract dispute with Orbitz and Travelport, the online travel giant’s largest shareholder.
American wants to change the way that its tickets are distributed, a move that could shake up the global travel industry and reduce its distribution costs. American wants travel agencies and giant ticketing clearinghouses such as Travelport’s Worldspan and Galileo, to use an electronic pipeline created by American, called Direct Connect, to handle all transactions with American.
The move would enable American to slash its distribution costs, because it pays fees of $3 to $5 to both Travelport’s subsidiaries and Orbitz for every segment of every trip booked through Worldspan or Galileo. American says Direct Connect employs superior technology that would enable it to tailor its offerings to individual customers.
But critics charge American’s aim is to steer more passengers to American’s website, AA.com, and to ultimately make it more difficult for consumers and travel agencies to compare its prices with those of other airlines.
The court ruling could hurt Orbitz, which says American accounted for about 5%, or $28.8 million, of the $575.1 million net revenue it generated during the first nine months of 2010.
“We will continue to seek an arrangement with American Airlines to distribute American’s tickets on Orbitz.com and Orbitz for Business,” Orbitz said in response to the court ruling.
But the maneuver could backfire for American if consumers turn to competing airlines to fill the void, said Henry Harteveldt, travel analyst with Forrester Research Inc.
“If AA pulls out of Orbitz, Orbitz becomes a less comprehensive shopping and booking resource for travelers,” Harteveldt said. “Of course, since customers who buy on the online travel agency sites are generally price-focused, they may neither notice nor care that American is not appearing on their flight searches. In that case, American stands to lose.”
