Thursday, November 29, 2001

Europe is forcing its airlines to share information on low fares with Web companies, and now U.S. online travel companies are renewing calls for the nation’s major air carriers to do the same.
The Interactive Travel Service Agency is again urging the Transportation Department to investigate Orbitz, an online ticketing service backed by major U.S. airlines that is quickly grabbing market share.
“We are hopeful the Transportation Department will take another serious look at [Orbitzs] business practices,” said ITSA Executive Director Antonella Pianalto.
The European Commission said last week that Opodo, a Web site owned by British Airways and eight other European airlines, will not force those carriers to put their lowest fares exclusively on its Web site. Opodo, based in London, plans to start selling airline tickets over the Internet next month.
The Transportation Department earlier this year investigated Orbitz, which began selling airline tickets over the Web in June. But the agency found no evidence of monopolistic behavior. The Justice Department is looking at the issue but, so far, has taken no action.
Orbitz requires charter members to provide access to their lowest fares, which it posts on its Web site. Competitors, including Inc. and Expedia Inc., say that gives Orbitz an unfair advantage.
So far, the federal government has not agreed and has not stepped in to force changes at Orbitz.
The decision by the European Commission “doesn’t have any implications for us,” Orbitz general counsel Gary Doernhoefer said. “I think U.S. regulators, whether it’s the Department of Transportation or the Justice Department, will wait to see if any legitimate antitrust issues actually arise, then they would address them.”
Objections from Orbitz competitors revolve around what is called the “most favored nations” clause included in contracts the company has with airlines.
The clause gives Orbitz the option to market the lowest published fares that any of its charter airlines offer. An airline can offer low fares to Orbitz competitors, but it must offer them to Orbitz, too.
Orbitz has never enforced the most favored nations clause, company spokeswoman Carol Jouzaitis said.
But the ITSA doesn’t believe that argument and wants the federal government to prohibit the airlines from giving Orbitz their lowest fares.
“Clearly they’ve had phenomenal growth,” Miss Pianalto said. “They say it’s due to their technology and their customer service. It’s false. It’s due to their access to fares.”
Transportation Department officials say they aren’t planning a new investigation of Orbitz’s business practices, despite the European Commission decision.
“The EU decision has no direct bearing on what we’re doing,” Transportation Department spokesman Bill Mosley said.
Orbitz has become the third-largest online travel agent since opening for business, and it will have a 6 percent share of the online travel market by the end of the year, according to PhoCusWright Inc., a Sherman, Conn., travel industry research firm.
Orbitz has 2.8 million registered users and sold $500 million in airline tickets through the end of October. has 30 million registered users, and Expedia had 9.4 million registered users at the end of September.
Online travel companies are competing for a share of the massive market for online reservation services. U.S. consumers will buy an estimated $13.8 billion in airline tickets online this year, PhoCusWright analyst Lorraine Sileo said.
AMR Corp.’s American Airlines, UAL Corp.’s United Airlines, Delta Air Lines Inc., Northwest Airlines Corp. and Continental Airlines started Orbitz, and 35 other airlines have signed on as charter members.

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