American Airlines Breaks Up With Orbitz

By JOSHUA FREED
|  Tuesday, Dec 21, 2010  |  Updated 7:50 PM CDT
View Comments (
)
|
Email
|
Print
American Airlines Breaks Up With Orbitz

AP

American Airlines said Thursday that it is pulling its flight listings from travel website Orbitz effective immediately.

advertisement

American Airlines said Thursday that it is pulling its flight listings from travel website Orbitz effective immediately.

A Chicago judge earlier Thursday declined to block the Fort Worth-based airline from yanking its flight listings, in a conflict that could have broader implications for the way travelers buy airplane tickets.

American Airlines said in a statement that it regrets any inconvenience the move may cause its customers.

"While we could not reach an agreement with Orbitz, we are committed to letting customers know of the multitude of options they have to purchase travel on American Airlines,” Derek DeCross, vice president of sales, said in a statement. “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.”

Tickets for American Airlines flights that are already purchased through Orbitz are still valid, but any changes must be made through the airline.

Orbitz Worldwide Inc. called American's decision "unfortunate" and said it still offers flights from more than 400 airlines worldwide and would continue to seek a way to sell American tickets, too. It said American Airlines tickets add-ons like rental cars and hotel rooms added up to about 5 percent of the company's revenue for the nine months that ended Sept. 30. It said it believes that any American Airlines tickets it loses will be replaced by tickets on other airlines.

American had threatened to pull out of Orbitz on Dec. 1. But Orbitz got a state court judge in Chicago to block the threat temporarily.

A court hearing was held last week and on Tuesday, Judge Martin S. Agran wrote that there's no need for a preliminary injunction to block American, because any potential breach of contract can be sorted out later with a lawsuit.

The request to block American was brought by privately held Travelport Ltd., which owns 48 percent of Orbitz. It also runs two of the biggest so-called global distribution systems, Galileo and Worldspan.

That's where the fight starts.

Airlines have traditionally paid online travel sites such as Orbitz a commission when they sell a ticket. American also pays fees to the global distribution companies that provide the flight information. American wants Orbitz to get that flight information directly from the airline, cutting out the global distribution systems.

American says that will reduce costs and also allow it to make more personalized offers to customers.

Travel industry advocates have said American's move will make it harder to comparison shop.

"There is profit in confusion, there is profit in fragmentation of 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 current financial arrangement around and have travel agents pay them for access to flight information, rather than American paying every time someone else sells a ticket on one of its flights.

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 in aftermarket trading.

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
What's New
Get NBCDFW on Mobile!
Get NBCDFW's free news and weather... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out