American Airline's pulls inventory from Orbitz

You can no longer book American flights on Orbitz or Orbitz for Business!

A court ruling authorizing American Airlines to withdraw its content immediately from Orbitz is merely the opening salvo in a bigger battle that may extend to other GDSs and airlines.

Reaction to yesterday’s ruling by the Circuit Court of Cook County in Illinois was swift and came from all quarters of the travel sector.

Paul Ruden, ASTA's president for legal and industry affairs, said that although the ruling did not spell the end of the case, it was "not a good sign." predicting similar moves “before long”.

"What the ruling effectively does is give American Airlines the freedom to execute its threat to remove its inventory from Orbitz, but it is putting at a risk a great deal of its business," he said

American Airlines responded within hours of the decision, discontinuing the listing of fares on Orbitz and Orbitz for Business.

Travelport, which owns a 48% stake in Orbitz Worldwide, said although the motion for a preliminary injunction was denied, the case will continue on its merits until the request for a declaratory judgment is adjudicated. Orbitz said it would continue to seek an arrangement with AA to distribute the airline’s tickets.

Revenue earned on American Airlines tickets and the associated ancillary products – including destination services, car, hotel and insurance – booked on our Orbitz.com and Orbitz for Business sites accounted for approximately 5% of Orbitz Worldwide's total revenue for the nine months ended Sept.30.

Ruden said AA must either believe it can recover the lost Orbitz business through other channels or does not consider this revenue to be significant. He also said the general public would in some cases not even realize that American Airlines’ fares do not appear in the Orbitz search results.

"The general public isn’t aware of the Orbitz-American Airlines issue and also doesn’t know which carriers fly in which market, so I think they may well lose business as travelers use Orbitz for their fare searches," Ruden said.

The Business Travel Coalition meanwhile said single-supplier direct connect proposals, like that of American Airlines, can cause "massive fragmentation of airfares and ancillary fees, depriving consumers of the ability to compare the total cost of air travel options across all airline."

Describing the battle as an "unprovoked assault" on Orbitz by American, BTC Chairman Kevin Mitchell alleged that the airline has repeatedly changed its rationale for why its direct-connect solution is needed.

"The failure of these shifting explanations to convince airline industry stakeholders to embrace the unproven system then led to a new strategy from American Airlines of blunt threats aimed at Orbitz," Mitchell said.

The Consumer Travel Alliance added its voice to the fray, criticizing American for its "heavy-handed attempt" to prevent consumers from easily searching and comparing its fares against those of other airlines.

CTA Director Charlie Leocha said the move would prevent comparison-shopping and "hide the real cost" of travel.

GDS company Sabre Holdings put its support behind Travelport, saying 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.

Travelport predicted AA’s plans to "force a more restrictive" distribution model would result in "inefficiencies and added costs" and would be "detrimental" to airline customers, travel agencies and consumers. American Airlines denied this.

"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," said Derek DeCross, American's vice president of sales.

DeCross added that the airline would continue to provide its fare content to travel agency partners, both through GDSs and through American’s own direct connection powered by Farelogix.

While there is no charge for using American’s direct connection, there is an initial technology cost to integrate agency’s systems with the airline’s direct connection.

It is interesting for me to remember that, when launched, Orbitz was the development child of the airlines (just like the GDS's were orginally developed by the airlines as the distribution channel) and the darling of the beginning of OTA's (online travel agency's). It was the first and "go to" website for leisure and shortly after, business travelers.

I urge all consumers (individual's and businesses) to recognize that when the airline try to drive you to only their website/distribution network, you are NOT guaranteed of the lowest fare! This practice is not good for the open market. Only travel agencies can give you the fair & unbiased picture.