The battle between American Airlines and Orbitz is costing the online travel agency heavy losses as shares for Orbitz have plummeted by 8 percent since the split.
Orbitz says that its U.S. leisure business has taken a hit from the loss of American Airlines flights from its Orbitz.com and OrbitzforBusiness.com sites.
Orbitz, the Web’s second-largest online travel agency, was dropped as a distributor after American Airlines won a court ruling in December of last year allowing the airline to yank its listings from the sites.
American filed to drop its listings after Orbitz refused to use American’s direct booking platform, and insisted the airline continue to use its global distribution system for ticketing.
American and other airlines have been working to bypass global distribution systems like the one owned Orbitz’s parent company, Travelport, in favor of direct bookings on their company sites.
Under the current model, global distribution systems charge the airlines a booking fee to schedule seat availability for hundreds of airlines and to distribute the information to travel agencies.
By cutting out the middleman, the airlines are hoping to bypass global distribution system fees.
With Orbitz feeling the sting from the loss of American listings, the online travel agency has expressed a willingness to make a deal with American Airlines that will work for both parties.
Finding a middle ground is not impossible. In January, American Airlines cut a deal with Priceline.com to use American’s direct connect technology to access fares.
By Adriana Padilla for PeterGreenberg.com.
Related Links: Wall Street Journal, Reuters
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