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AA Responds to Travelport, Threatens End to Participation in Orbitz

November 5, 2010 By: George Dooley

Customers still can compare fares and purchase tickets for travel on American Airlines on Orbitz and Orbitz-powered sites, American Airlines (AA) said in response to statements by Orbitz and Travelport critical of AA’s decision to launch Direct Connect.

“We will continue to negotiate in good faith to reach a viable, mutually beneficial agreement with Orbitz,” the carrier said in a statement.“AA's position remains that our distribution channels need to be cost-effective and efficient while also enabling more choices for customers through new products/service offerings.”

American responded to Travelport’s charges that AA’s Direct Connect policy was anticompetitive, in addition to issuing a December 1 threat to end to AA participation in Orbitz.

“American Airlines can deliver more customized and relevant products and services to our customers through our travel partners, but we must look beyond the current paradigm to succeed in this quest,” AA said in its statement. “Products and services in air travel continue to evolve as airlines distinguish themselves from one another and the same must be true for how products are distributed. This is an opportunity for our travel agency partners to distinguish themselves from their competition and better serve our joint customers.”

Barney Harford, Orbitz Worldwide's president and CEO, also addressed the issue, confirming that Orbitz may face a December 1 termination of AA’s participation. “American Airlines sent us a letter earlier this week indicating its intent to terminate its participation on our Orbitz and Orbitz for Business sites effective December 1,” Harford said. “American Airlines has publicly expressed its intention to force agencies to connect directly to its systems in order to access its content. The current GDS model is pro-competitive and pro-consumer. GDSs ensure that travel agents have access to 'full content,' i.e. all an airline's publicly available fares.

“Furthermore, GDSs enhance competition between airlines, and create transparency, by ensuring that travel agents can offer consumers a comprehensive choice of airlines,” Harford continued. “A number of business travel and consumer advocacy organizations have criticized American's effort, and we join them in that criticism. By taking this action, American is attempting to limit travelers' choices when they can least afford it. At Orbitz Worldwide we operate websites globally that serve millions of consumers every month, and we sell tens of millions of airline tickets every year. American and Orbitz are both important participants in the travel distribution landscape. Orbitz is working actively to resolve this issue to the benefit of our mutual customers.”

Paul Ruden, ASTA’s senior vice president of legal and industry affairs said that he expected ASTA to issue a statement on the controversy early next week. Central to AA’s position is its efforts to recruit agents and travel management firms to use AA’s Direct Connect system.

The Business Travel Coalition (BTC) and the Interactive Travel Services Association (ITSA) are also expecteed to weigh in on the issue.

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