AMR Corp.'s American Airlines said it would pull its flight listings from Orbitz Worldwide Inc., beginning Dec. 1, unless the two companies can agree on how the online-travel agent gets access to the data, according to the Wall Street Journal.
Airlines - American in particular - have been vocal in wanting travel agents and online travel sites to share the expenses of accessing flight listings. American's move is an attempt to change how that data are distributed, reduce the airline's costs and enable it to get a bigger piece of online-travel purchases.
Orbitz said American is threatening to disrupt the current system.
American wants to "force agencies to connect directly to [American's] system to access content as opposed to using global distribution systems," or GDSs, Orbitz President and Chief Executive Barney Harford told the WSJ.
Traditionally, a GDS - such as Travelport Ltd. and Sabre Holdings Corp. - acts as intermediary between travel agents and travel providers, facilitating the search and booking of flights. The GDS charges the airline a fee when a travel agent books a flight.
Cory Garner, American Airlines' director of distribution strategies, disagreed with Orbitz's characterization. He said American isn't looking to bypass the GDS; rather, the airline wants to use new technology that routes the data differently and allows flights to be customized. It also would make optional service costs, like priority seating and baggage fees, more transparent.
Garner said American also would like to include the option of communicating directly with travel agents through its Direct Connect program. He said American has been in talks with the GDS companies about using Direct Connect, but no agreement has been reached.
GDS companies were established before the Internet to make it easier for travel agents to access flight booking information. Sabre was built by American in the 1960s and was spun off from the company in 2000. GDS companies remain big players in linking airlines to high-margin business travelers via travel agents and corporate accounts.
American said the decision to rethink the distribution model wasn't made because of anything Orbitz did and that the airline is in various stages of discussion with other online travel agents.
"It's very clear that American has drawn a line in the sand and is girding itself for a fight," Forrester Research analyst Henry Harteveldt said. "I understand American's desire to reduce costs and have more control over its distribution strategy, but if it pulls out of GDS, it's possible it may be the only airline doing this and it may be counterproductive."
Orbitz CEO Harford said no other airlines or partners have approached Orbitz to terminate their agreements like American has.
"We have very strong relationships with the vast majority of our supply partners," Harford said. "This really is an initiative that is unique to American."
Representatives from United Continental Holdings Inc., Delta Air Lines Inc. and US Airways Group Inc. didn't respond to requests for comment.
American said customers can still compare and purchase American fares on Orbitz sites at this time and that the airline continues to negotiate with Orbitz to reach a "viable, mutually beneficial agreement."
Travelport, a private company which owns about 48 percent of Orbitz, said American's action may violate its "contractual obligations" and could lead to inefficiencies and associated costs. Travelport said it would take "a number of actions to defend travel agents and consumers" but didn't specify its moves.
Representatives from Orbitz rivals Expedia Inc. and Priceline.com Inc. didn't respond to requests for comment, nor did Sabre, which also owns online travel agent Travelocity.
