American Airlines trying to drastically alter air distribution system
In a move that could shake up the global travel industry, American Airlines yanked all of its airfares from Orbitz Worldwide Inc. after a circuit court judge ruled in its favor.
The Business Travel Coalition (BTC) said it was the only the beginning of a long and protracted battle.
“The stakes in this conflict are clear: either an improved airline industry and distribution marketplace around the consumer, or one that subordinates consumer interests to the self-serving motivations of individual airlines endeavoring to impose their wills on consumers and the other participants in the travel industry,” said BTC Kevin Mitchell.
Perhaps ironically, Orbitz was formed a decade ago by American, United and other airlines.
The carrier said it would continue to honor tickets sold through Orbitz and advised customers who needed to change travel plans to contact American Airlines reservations by calling 1-800-433-7300.
“The drastic and risky maneuver by American comes as it battles Orbitz and Travelport, the online travel agency’s largest shareholder, over the complex technology that has revolutionized how consumers shop for flights,” said the AP.
American is pressuring travel agencies and giant ticketing clearinghouses, such as Travelport’s Worldspan and Galileo, to use an electronic pipeline created by the airline, called AA Direct Connect, to handle all transactions with the carrier.
The move would lower American’s distribution costs and diminish the role of global distribution systems such as Sabre, another American creation, that have acted as the industry’s middlemen for the past three decades, according to the airline.
"It’s very clearly a shot across the bow for all (global distribution systems) and also online travel agencies about the future of distribution," said Douglas Quinby, senior director of research at travel research firm PhoCusWright Inc. "All of the (online travel agencies) are watching this very, very closely, and other airlines as well."Consumer advocates warned that if other carriers also sidestep the airline industry’s middlemen, traditional and online travel agencies like Orbitz, Expedia Inc. and Priceline could lose the ability to display the best available fares to bargain-minded consumers.
Without such transparency, travelers would lose the ability to quickly track down the best deals on the Internet.
"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, which represents corporate travel buyers. "That will absolutely drive all the fares up."
Analysts aren’t, however, certain whether other airlines will follow American’s lead or try to snatch away its customers.
The battle is expected to continue in the courtroom.
By David Wilkening
David
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