American, US Airways will stop listing on Orbitz
08/26/2014 1:16 PM
08/26/2014 5:01 PM
American Airlines and US Airways are pulling flight listings from Orbitz after they were unable to reach agreement on a long-term contract.
Shares of Orbitz Worldwide Inc. fell more than 4 percent in afternoon trading on Tuesday.
American said it had already dropped its fares from the travel website and that US Airways listings would be pulled Monday.
Corporate customers of the airlines will still be able to book travel on Orbitz, but individuals will have to go to the airlines’ websites or other travel agents – including online ones such as Expedia and Travelocity.
Orbitz did not immediately return messages seeking comment.
The dispute centers on cost. Scott Kirby, president of American Airlines Group Inc., which owns both airlines, said the company “worked tirelessly with Orbitz to reach a deal” that would keep distribution costs competitive with those of low-cost carriers. Southwest Airlines, for example, sells 80 percent of its tickets on its own website, a move that saves money on travel-agency commissions.
American has been trying for several years to cut commission spending by selling more tickets directly to consumers. That has led to fights with online travel agencies such as Orbitz Worldwide Inc. and Expedia Inc. and intermediaries such as Travelport and Sabre that operate ticket-distribution systems.
Charlotte Douglas International Airport is American’s second-busiest hub, with 650 daily flights and more than 10,000 employees based in the city. Since merging with US Airways in December, the airline’s dominance in Charlotte has grown: American operates more than 90 percent of daily flights to and from Charlotte Douglas.
American pulled its flights off Orbitz in 2010 and sued the travel agency in 2011, claiming that it violated antitrust laws by downplaying American flights when consumers searched the site. The companies reached a settlement last year. Terms were not disclosed.
Expedia also stopped showing American flights for a time, although that ban was lifted after the companies agreed on a new contract in 2011.
Orbitz shares fell 4.6 percent to close at $8.04.
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