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Orbitz weighs in on American Airlines ruling [BREAKING]
American Airlines is out of Orbitz as of today. This ends a legal tangle with Travelport that was initiated back in November when the airline announced its intention. According to a statement from Orbitz, "It is unfortunate that as of December 21, American Airline flights will no longer be available on our Orbitz.com and Orbitz for Business sites. We are confident that our consumer value proposition remains strong. Orbitz Worldwide has access to more than 400 airlines globally and sells tens of millions of air tickets each year."The statement explains that American Airlines tickets and "associated ancillary products – including destination services, car, hotel and insurance – booked on our Orbitz.com and Orbitz for Business sites accounted for approximately 5 percent of Orbitz Worldwide total revenue for the nine months ended September 30, 2010." While American Airlines does not account for 5 percent of the online travel agency's revenue directly, the lost ticket sales comes with an additional loss of revenue based on customer behavior.
From the fourth quarter of 2009 through the end of the third quarter this year, Orbitz generated $800 million in sales for American airlines, which shows just how much was at stake in this relationship.
The full unedited statement from Orbitz is below:
"It is unfortunate that as of December 21, American Airline flights will no longer be available on our Orbitz.com and Orbitz for Business sites. We are confident that our consumer value proposition remains strong. Orbitz Worldwide has access to more than 400 airlines globally and sells tens of millions of air tickets each year.
["]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 total revenue for the nine months ended September 30, 2010. In the near term, we believe that most of this ticket volume will be replaced by other airline suppliers, and that we will still continue to earn most of the associated ancillary revenue.
["]Orbitz Worldwide is one of the largest travel companies in the world. We will continue to seek an arrangement with American Airlines to distribute American's tickets on Orbitz.com and Orbitz for Business. For the most recent four quarters that we have announced -- from the fourth quarter of 2009 through the third quarter of 2010 – Orbitz Worldwide generated over $800MM of sales for American Airlines.["]
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Filed under: North America, United States, Airlines
Reader Comments (Page 1 of 1)
Santosh Krishnan Dec 22nd 2010 11:53AM
It's unfortunate for American. If others buy tickets as I do, then I rely on Orbitz and Kayak to get an idea of who is selling seats for what price, before making up my mind to buy. I never buy on Southwest or Jetblue simply because they never come up on my search results. Now, it would seem, American is also not going to show up on my search results.
james Dec 22nd 2010 12:38PM
Another consideration for the consumer besides price selection, is scheduling selection. Sometimes the schedule and connections trump price for me, especially on long hauls. There's a world of difference between going to places in 10 hours versus 24 or more hours. This move makes that decision more difficult as well.