Judge won't stop American from dropping Orbitz
A judge on Tuesday declined to block American Airlines from pulling its flight listings from the travel website Orbitz, in a conflict that could have broader implications for the way travelers buy airplane tickets.
Orbitz continued to show American flights on Tuesday afternoon after the ruling was issued. It wasn't immediately clear what American would do next. The airline issued a statement praising the ruling and saying it will announce its plans shortly. An Orbitz spokesman, asked whether the website would stop displaying American flight information, referred questions to the airline.
American had threatened to pull out of Orbitz on Dec. 1. But Orbitz got a state court judge in Chicago to block the threat temporarily.
A court hearing was held last week and on Tuesday, Judge Martin S. Agran wrote that there's no need for a preliminary injunction to block American, because any potential breach of contract can be sorted out later with a lawsuit.
The request to block American was brought by privately held Travelport Ltd., which owns 48 percent of Orbitz. It also runs two of the biggest so-called global distribution systems, Galileo and Worldspan.
That's where the fight starts.
Airlines have traditionally paid online travel sites like Orbitz a commission when they sell a ticket. American also pays fees to the global distribution companies that provide the flight information. American wants Orbitz to get that flight information directly from the airline, cutting out the global distribution systems.
American says that will reduce costs and also allow it to make more personalized offers to customers.
Travel industry advocates have said American's move will make it harder to comparison shop.
"There is profit in confusion, there is profit in fragmentation of all the fares and the fees so consumers can't comparison shop," said Kevin Mitchell, chairman of the Business Travel Coalition, which represents corporate travel buyers.
He said airlines ultimately would like to flip the current financial arrangement around and have travel agents pay them for access to flight information, rather than American paying every time someone else sells a ticket on one of its flights.
American is the third-biggest U.S. airline, so travelers are likely to notice its absence from Orbitz. Orbitz said money from American Airlines tickets and associated add-ons like rental cars and hotel rooms added up to about 5 percent of the company's revenue for the nine months that ended Sept. 30. Orbitz said it believes that any American Airlines tickets it loses will be replaced by tickets on other airlines.