American Airlines pulled its flights from the Orbitz travelwebsite on Tuesday in a dispute that could eventually affect theway travelers buy airplane tickets online.
The airline said its tickets sold previously on Orbitz are stillvalid. And American Airlines tickets can still be bought at theairline's own website as well as other travel websites. Americanpulled its tickets from the Orbitz for Business site as well.
The dispute is the latest sign of strains between airlines andthe companies that sell airline tickets, including online sellerslike Orbitz.
Airlines have traditionally paid sellers a commission. Americanalso pays fees to the global distribution companies that providethe flight information.
Now, American wants Orbitz to get that flight informationdirectly from the airline, cutting out the global distributionsystems. American has said that will reduce costs and also allow itto make more personalized offers to customers such as hotels andcar rentals.
The global distribution systems have not moved as fast as theycould have to upgrade their technology, but American's move withOrbitz is "rather severe," said Henry Harteveldt, a travel analystfor Forrester Research. "It seems like they want to scorch theearth."
He predicted that travelers who want to fly on American willseek out its tickets on the airline's website. Travelers who don'tknow what happened with Orbitz, or don't care which airline theyfly, are unlikely to notice American's absence from Orbitz, hesaid.
Traveler advocates have said American's move will make it harderto comparison shop.
"There is profit in confusion, there is profit in fragmentationof all the fares and the fees so consumers can't comparison shop,"said Kevin Mitchell, chairman of the Business Travel Coalition,which represents corporate travel buyers.
He said airlines ultimately would like to flip the currentfinancial arrangement around and have travel agents pay them foraccess to flight information, rather than American paying everytime someone else sells a ticket on one of its flights.
American's vice president for sales, Derek DeCross, said in astatement that the airline needs to be "free to customize itsproduct offerings to improve the customer experience as well asdistribute its products in a way that does not result inunnecessary costs."
American had threatened to pull out of Orbitz on Dec. 1. ButOrbitz got a state court judge in Chicago to block the threattemporarily. It made its move on Tuesday shortly after judge MartinS. Agran declined to issue an injunction. Agran ruled that anybreach of contract can be sorted out with a lawsuit later.
The request to block American was brought by privately heldTravelport Ltd., which owns 48 percent of Orbitz. It also runs twoof the biggest so-called global distribution systems, Galileo andWorldspan. American spokesman Ryan Mikolasik said it has beennegotiating with other online ticket sellers. The Orbitznegotiation was made more difficult because of Travelport'sinvolvement as owner of the two global distribution systems, hesaid.
Orbitz Worldwide Inc. called American's decision "unfortunate"and said it still offers flights from more than 400 airlinesworldwide and would continue to seek a way to sell Americantickets, too. It said American Airlines tickets add-ons like rentalcars and hotel rooms added up to about 5 percent of the company'srevenue for the nine months that ended Sept. 30. It said itbelieves that any American Airlines tickets it loses will bereplaced by tickets on other airlines.
Shares of American parent AMR Corp. rose 14 cents to close at$8.05. Orbitz shares rose 22 cents, or 3.5 percent, to close at$6.44, but then fell 16 cents, or 2.5 percent, to $6.28 inaftermarket trading.
Also Tuesday, Delta Air Lines Inc. said it would stop sellingtickets through three smaller travel websites, CheapOAir.com,OneTravel.com, and BookIt.com effective on Dec. 17.
Last week a Delta executive told analysts that some ticketvenues have more value than others. The airline wants "as direct arelationship and channel to our best customers as we can," saidGlenn Hauenstein, Delta's executive vice president for networkplanning, revenue management, and marketing. He said he's aimingfor Delta's own website to be more like an Apple store andsuggested that other travel websites are more like Best Buy, withsimilar products, but a different customer experience, he said.
Freed reported from Minneapolis. AP Airlines Writer David Koenigin Dallas contributed to this report.
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