December 23, 2010

American Airlines Leaves Orbitz

American Airlines has cut ties with online travel giant Orbitz, in a move that experts say could take a toll on the global travel industry if other airlines follow suit.

American Airlines has been entangled in a dispute with the travel business and its corporate parent, Travelport, after announcing that it would no longer allow flights and fares to be posted on the popular travel-booking site.

In November, a Chicago judge issued a temporary restraining order preventing American from severing ties with Orbitz. But on Tuesday, the court lifted the order, freeing the airline to end the relationship.

American told AFP that other online travel sites are not affected by the move.

Orbitz said American Airlines made up about 5 percent of the 575 million dollars in net revenue it generated during the first nine months of 2010.

Orbitz was among a handful of Internet travel agencies that transformed how American consumers shop for flights, by consolidating airfares from several airlines all on one site, allowing passengers to shop for the best travel deals.

American Airlines recently said, however, that it wants more control over how it sells tickets and other goods and services to online travel sites.

The airline hopes to convince future online travel agencies to use an electronic pipeline of its own creation, called AA Direct Connect.

Consumer advocates warned that if other airline carriers follow in AA's footsteps, which include Expedia and Priceline, passengers could lose a powerful tool in saving money on flights.

"This is simply a heavy-handed attempt by American Airlines to prevent consumers from easily searching and comparing its fares against those of other airlines," Charlie Leocha, director of the non-profit Consumer Travel Alliance, told AFP.

"American appears to have no idea why we fly. We fly to get from point A to point B in the most convenient and cost-effective manner possible."

"We don't fly to be manipulated by proprietary airline reservation systems that limit our choices, prevent comparison shopping and hide the real cost of travel," he said.

"As soon as the information isn't all there, you can't compare apples to apples -- the complete costs of all the offers in the marketplace," said Kevin Mitchell, chairman of the Business Travel Coalition -- a travel non-profit which represents corporate travelers.

"That will absolutely drive all the fares up," he said. 

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