Expedia Hides American Airlines' Fares in Support of Travel Website Orbitz

By Mary Jane Credeur - Dec 23, 2010 2:10 PM MT


Dec. 23 (Bloomberg) -- Henry Harteveldt, a senior analyst at Forrester Research Inc., talks about yesterday's court ruling allowing AMR Corp.’s American Airlines to pull flight listings from Orbitz Worldwide Inc. and the potential impact on the companies.¶ Harteveldt speaks with Betty Liu on Bloomberg Televsion's "In the Loop." (Source: Bloomberg)


Expedia Inc.’s travel website is hiding airfares for American Airlines after the third-largest U.S. carrier pulled data from Orbitz Worldwide Inc. as part of a legal dispute.
Prices for American flights no longer appear at the top of the site when passengers search for tickets, while those for competitors such as United Continental Holdings Inc. are still shown side by side so travelers can compare.


“This has been done in light of both American Airlines’ recent decision to prevent Orbitz from selling its inventory, and a possible disruption in Expedia’s ability to sell American Airlines tickets when our contract with American Airlines expires,” Expedia said today in an e-mailed statement. The company declined to say when its accord with American ends.

The move by Bellevue, Washington-based Expedia widened the conflict between online travel agencies and airlines such as American that seek to drive more consumers to their own websites. AMR Corp.’s American won a court ruling against Orbitz on Dec. 21 and removed its flight data within hours.


“We’re disappointed that Expedia is making American Airlines flights and fares more difficult to find,” Ryan Mikolasik, a spokesman for American, said in an e-mailed statement. “This discriminatory action is unwarranted, especially considering that American has taken no action against and continues to operate in good faith with Expedia.”
A search today of the Expedia.com site for a ticket from American’s hometown hub at Dallas-Fort Worth airport to its Chicago hub in the first week of January showed a nonstop United flight for $282 and one by US Airways Group Inc. for $511. A message read “see below” for American information.


Consumers must click through outbound and return flight times to see the price of the American ticket.
American has developed a system called Direct Connect that provides fare pricing and options directly to larger online travel agencies. The Fort Worth, Texas-based airline also is trying to handle more bookings through its AA.com website.


American dropped Orbitz after an Illinois state court in Chicago lifted a temporary restraining order granted last month that prevented the airline from doing so. Orbitz is partly owned by Travelport LP, which distributes airline fare data.

Delta Air Lines Inc., the second-largest U.S. carrier, said Dec. 21 it was terminating three online travel sites, CheapOAir.com, OneTravel.com and BookIt.com as authorized travel agents.


United Continental, the world’s largest airline, plans to end ties with Travelport for reservations and switch to Hewlett- Packard Co.’s Shares system, which was used by merger partner Continental Airlines, Chief Information Officer Keith Halbert told employees in a Dec. 21 memo. A United spokesman, Mike Trevino, confirmed the memo’s authenticity today.

Expedia fell 29 cents, or 1.1 percent, to $26.33 at 4 p.m. New York time in Nasdaq Stock Market trading. AMR slid 17 cents, or 2.1 percent, to $7.78 in New York Stock Exchange composite trading.

The American-Orbitz dispute flared on Nov. 4 when the airline said it would stop providing fare data on Dec. 1 unless a new contract was reached. That triggered a court bid to block the move and criticism by Orbitz Chief Executive Officer Barney Harford that American was making a “broad attack” on ticket distributors.

Expedia picked up that theme in its e-mailed statement.
‘Anti-Choice’
“American Airlines has shown it only intends to do business with travel agencies through a new model that is anti- consumer and anti-choice,” Expedia said.
“American Airlines’ proposed direct connect model will result in higher costs and reduced transparency for consumers, making it difficult to compare AA ticket prices and options with offerings by other airlines,” Expedia said.

Sabre Holdings Corp., the parent of Travelocity.com, said Dec. 21 that American’s actions will “make it much harder and more costly for agents and consumers to easily comparison shop among airlines, which will result in increased prices for consumers.”
Sabre is a former American unit that was spun off by the airline in 2000.
To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net