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American Airlines and Orbitz tangled in antitrust battle
The online travel agency battle continues ... and it's getting ugly. The latest move comes from American Airlines, which is suing Orbitz and Travelport for alleged anticompetitive behavior. So, what started in November as a battle over fare distribution has escalated into an antitrust war.Through the end of the year, Orbitz and American Airlines fought it out, ultimately winding up in court, where American emerged victorious. Along the way, the two sides in this commercial combat – travel suppliers, such as airlines, and online travel agencies – found other fields of battle, with Expedia, Delta, CheapOair and BookIt among those entering the fray.
American is claiming that Orbitz is trying to "control the distribution of airline tickets," according to a report by legal magazine Corporate Secretary. The article gives some insight into the legal aspects of what's happening:
'The lawsuit raises innovative but real questions about market power and behaviors in the current airline structure,' says Spencer Waller, professor and director of Institute for Consumer Antitrust Studies at Chicago-based Loyola University. 'But I don't think this lawsuit will get to a resolution on the merits of antitrust claims. I view this case primarily as a continuation of the dispute and negotiations over fees in the online travel agency.'
For American, the disintermediation of online travel agencies would lead to direct ownership of the consumer, as well as wider margins on each transaction. Corporate Secretary continues:
'The dispute raises real antitrust concerns because firms have substantial market power, and higher fees are being generated that are being passed on to consumers,' Waller adds. 'The antitrust law is looking at it from a consumer perspective and in the end, this law would want the airlines to produce lower fees.'
We hit a period of calm earlier this year, but the war in the travel industry is heating up once again. The parties are back in court, only a few months after American's last victory, and it looks like we'll all have to wait for the judge.
You can read American's filing here.
Filed under: Business, North America, United States, Airlines
Reader Comments (Page 1 of 1)
kwjayhawk Apr 14th 2011 3:37PM
I'm sorry, I have to chime in:
AA should be more concerned with competitive prices than quibbling with a search engine. Time after time American is always THE most expensive airfare. They must survive on corporate fliers where the fare is budgeted into accounts.
Orbitz should be the least of their worries.