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BTC Warns of Losses to AA From Orbitz Policy

December 23, 2010 By: George Dooley

The Business Travel Coalition (BTC) questioned if the estimated $800 million in sales Orbitz delivers to American Airlines may not be a true indication of the revenue at risk for AA, and if AA’s policy might not benefit the airline’s competitors.

The BTC noted that the airline pulled its fares from Orbitz immediately following an Illinois court's ruling in the AA/Travelport litigation that lifted a temporary restraining order previously issued by the court.

BTC cited a May 2010 PhoCusWright report that said 87 percent of travelers start their shopping process on the Internet: “What¹s more, some 28 percent of shoppers at online travel agencies (e.g., Orbitz) end up purchasing on suppliers' websites. The point: Consumers who start the shopping process on Orbitz before going to will now completely miss AA offerings and end up on AA competitors websites.”

“This could represent a much bigger number than AA is willing to acknowledge. American acts as if it's the country's biggest airline when it's really number four and falling. Consumers may not even know American's flights are missing. The ones who will gain the most here are American's competitors who will enjoy feasting this Christmas on turkey served up by American. Delta, United, Southwest and others should be grateful for this early Christmas present,” said Kevin Mitchell, BTC chairman. “American's decision to immediately pull its flight information from Orbitz shows that it has near-zero interest in preserving an open and transparent marketplace."

“Moreover, if a consumer booked an American flight on Orbitz, and now needs to change it, she will need to work through American Airlines Reservations, and then go back to Orbitz for hotel and rental car changes. That's a recipe for huge consumer confusion and frustration right in the heart of the holiday season,” Mitchell said.



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By George Dooley | December 23, 2010
AA's decision on Orbitz may benefit competitors.