Update: The situation has been resolved and American flights are now bookable on Orbitz again.
In a bold move and with legal rulings in their favor, American Airlines has pulled all of its flights from Orbitz.com.
“Q: Why aren’t American’s fares available on Orbitz?
A: We were unable to reach a mutually beneficial agreement with Orbitz. As a result, Orbitz is no longer authorized to display our schedules or sell tickets for travel on American Airlines or American Eagle.
AA did this ostensibly to have greater control of how its tickets are sold by third parties, and many see this as a ”shot across the bow” and a sign of future drama to unfold between the airlines and online travel agencies.
In a nutshell, American is trying to make any online travel agent that sells AA tickets to use a new proprietary system called Direct Connect. This system gives AA greater ability to control ticket pricing and howtickets are sold. For example, AA now sells bonus miles and premium seats at time of booking on aa.com- something that clunky Orbitz.com cannot handle. I suppose AA sees this inability to switch to their new system as a long-term negative and has decided to up the stakes by pulling their flights from Orbitz (but not any of the other online travel agencies…yet).
Ironically, Orbitz was founded in 2001 as an airline industry response to online travel agent giants Travelocity and Expedia. Continental, United, Delta, Northwest and American jointly chipped in $145 million to create Orbitz- and now American is trying to take out the beast that they helped create.
However, AA is not the only airline that protects its ticket outlets. Try finding a Southwest flight on any of the major online travel agencies- isn’t going to happen. However, Southwest has trained its loyal following to book almost exclusively on southwest.com. The question is- will American be able to do the same?
In the short term, I see American losing business from this move. So many travelers rely on agencies like Orbitz and Travelocity to show them the lowest fares when booking a trip. If American isn’t one of the cheap fare options, I imagine many people will book whatever is available- leaving AA in the dust.
Although a judge in Illinois rebuffed Orbitz’ claim that American was using coercive tactics, I can’t imagine the legal battles will stop here. It will be interesting to see how the rest of the airline industry reacts and if American can “coerce” all other travel agencies to use the Direct Connect service.
What is certain, whether you fly American Airlines or not, is that the way you are able to search for the cheapest fare just got a little bit more complicated. If you are an avid Orbitz user and American Airlines flyer, be sure to let them know what you think of their decision by emailing them. In the end, American will do whatever it thinks will make them the most money in the long run, so letting them know your thoughts as a valuable customer is critical.
I’m not sure how this will end up, but I do see major changes in the airline industry as travel picks up and airlines are emboldened to make handsome profits. Google even got in on the action and recently purchased ITA, the pricing software that is used by many travel industry players (including American and Orbitz). Delta CEO Richard Anderson even recently made comments about changing the way Delta prices tickets.
While I hate doomsday predictions, something tells me that travel is going to get a whole lot more expensive in the next couple years. Only time will tell. What are your thoughts on the future of the airline industry?
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