American Airlines and Orbitz tangled in antitrust battle

by Tom Johansmeyer on

The online travel agency battle continues … and it’s getting ugly. The latest move comes from American Airlines, which is suing Orbitz and Travelport for alleged anticompetitive behavior. So, what started in November as a battle over fare distribution has escalated into an antitrust war.

Through the end of the year, Orbitz and American Airlines fought it out, ultimately winding up in court, where American emerged victorious. Along the way, the two sides in this commercial combat – travel suppliers, such as airlines, and online travel agencies – found other fields of battle, with Expedia, Delta, CheapOair and BookIt among those entering the fray.

American is claiming that Orbitz is trying to “control the distribution of airline tickets,” according to a report by legal magazine Corporate Secretary. The article gives some insight into the legal aspects of what’s happening:

‘The lawsuit raises innovative but real questions about market power and behaviors in the current airline structure,’ says Spencer Waller, professor and director of Institute for Consumer Antitrust Studies at Chicago-based Loyola University. ‘But I don’t think this lawsuit will get to a resolution on the merits of antitrust claims. I view this case primarily as a continuation of the dispute and negotiations over fees in the online travel agency.’

For American, the disintermediation of online travel agencies would lead to direct ownership of the consumer, as well as wider margins on each transaction. Corporate Secretary continues:

‘The dispute raises real antitrust concerns because firms have substantial market power, and higher fees are being generated that are being passed on to consumers,’ Waller adds. ‘The antitrust law is looking at it from a consumer perspective and in the end, this law would want the airlines to produce lower fees.’

We hit a period of calm earlier this year, but the war in the travel industry is heating up once again. The parties are back in court, only a few months after American’s last victory, and it looks like we’ll all have to wait for the judge.

You can read American’s filing here.

FAA adds to night shift, hopes controllers stay awake

by Chris Owen on
Last month, the only flight controller at Washington’s Reagan National Airport (DCA) fell asleep during the overnight shift and two commercial jets landed on their own. The FAA responded by suspending the sleepy controller and ordering two controllers on duty during the overnight shift at Reagan National. Now, after other controllers were found sleeping on duty, the FAA will put an extra one on the midnight shift at 27 control towers that currently have only have one on duty at that time.

“I am totally outraged by these incidents. This is absolutely unacceptable,” said Transportation Secretary Ray LaHood to the Associated Press. “The American public trusts us to run a safe system. Safety is our No. 1 priority, and I am committed to working 24/7 until these problems are corrected.”

It sounds like there might not be much sleep for those investigating these incidents any time soon either.

Monday, at Seattle’s Field-King County International (BFI) a controller fell asleep resulting in his suspension as well. That controller was already facing disciplinary action for sleeping on two separate occasions while on the early evening shift in January. Wednesday, at Reno-Tahoe International Airport (RNO), a medical flight landed on its own when they could not raise the airport’s tower for 16 minutes.

“Air traffic controllers are responsible for making sure aircraft safely reach their destinations,” said FAA Administrator Randy Babbitt. “We absolutely can not and will not tolerate sleeping on the job. This type of unprofessional behavior does not meet our high safety standards.”

These incidents, perhaps the result ongoing concerns about those who control our skies, should really be no big surprise though.

Being an air traffic controller has long been a stressful, tiring job. There are three big challenges an air traffic controller faces every day says stuckmic.com. The complexity of traffic, working long shifts with no break, and dealing with air traffic during bad weather.

Falling asleep helps on the “long shifts without a break” problem but does not help the other two very much. Even awake, air traffic controllers have their share of problems

“In the 12 months ending on Sept. 30, 2010, there were 1,889 operation errors – which usually means aircraft coming too close together, according to the Federal Aviation Administration. That was up from 947 such errors the year before and 1,008 the year before that” reports ABCNews.

Let’s hope the FAA is addressing those other issues as well.

Space Travel Update: Texas, Virgin and the Federation

by Chris Owen on

Space travel for all of us is slowly becoming a reality as legislators weigh in, job postings go up and the future begins to unfold before our eyes. Just a day after the 50th anniversary celebration of the world’s first human spaceflight in 1961, the timing could not be better.

Commercial Space Travel got a big thumbs up from the Texas legislature this week as lawmakers approved a bill Monday limiting the liability that space travel companies might face.

The Texas legislature move provides protection for space travel companies operating in the state. While still liable for gross negligence or damage to non-participants, those who sign up for a ride into space would assume the risk of space travel should they be injured or die.

Meanwhile, Virgin Galactic has launched its search for pilot-astronauts to work at their private spaceline. Qualified candidates can apply online as can those interested in booking a flight.

“These will be the very first commercial Pilots-Astronauts, something which will undoubtedly excite the interest of a great many” says Virgin in the job posting. Suddenly this is not the whim of a billionaire off on his next great adventure. Job postings bring it right down here to street level don’t they?

Gadling’s Justin Delaney took us to San Francisco last week as Gadling took part in Virgin’s latest celebration of innovation and gave us a look at commercial plans to pierce space with their Galactic platform.

Finally, the Commercial Spaceflight Federation is set for a big announcement today. The industry association of leading businesses and organizations working to make commercial human spaceflight a reality, will be making a major announcement today, the day after the 50th anniversary celebration of the world’s first human spaceflight in 1961.

Flickr photo by NASA Goddard Photo and Video

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Google to dominate online travel selling, we hope

by Chris Owen on

Late last week, Google won government clearance on its $700 million bid for ITA Software in a deal that opens the door for the innovative Internet search powerhouse to dominate online travel selling.

ITA Software, who’s latest innovations include include ITA PSS, a next-generation passenger services system, Needle, a smarter way to organize and publish data on the web, and OnTheFly, an airfare shopping mobile application will make a nice addition to Googles stable of brands. ITA already powers the reservation systems of most US airlines and several online fare-comparison brands like Kayak, TripAdvisor and Hotwire. It looks like a match made in heaven as tech-savvy Google gets an infusion of travel sense from a leader in that game.

But there is a catch. Make that possible bump in the road that we hope they get over smoothly.

While Google is buying and hiring to solidify the top position in all it does, it’s competitors and the government are looking very closely at what they are up to. They fear Google could use it’s substantial Internet search engine clout to monopolize the online travel business.

Would that be the same fear Yahoo might have had about Google’s search engine capability? Perhaps a natural order of things will play out here too.

To win approval, Google agreed to ongoing federal monitoring of its behavior. Google also agreed that ITA will continue to provide service to existing customers for five years in a “reasonable and nondiscriminatory way”. That should satisfy the Federal Trade Commission and Justice Department for a while but they both have Google in their sights, ready to pull the trigger on a full-scale investigation, given the chance.

In his blog, Google’s Senior Vice President Jeff Huber writes:

“How cool would it be if you could type “flights to somewhere sunny for under $500 in May” into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily? Well that’s exactly why we announced our intention to buy ITA Software, a Cambridge, Mass.-based company that specializes in organizing airline data last July-and we’re excited that the U.S. Department of Justice today approved our acquisition.”


Last July, Gadling’s Darren Murph called the ITA buy “a huge win for consumers who are tired of crawling three different airline search engines to get a somewhat comprehensive look at their options.” adding “we personally can’t wait for this marriage to officially bear fruit.”

Now that the sale has been approved and Google has agreed play nice, we should start seeing something pretty quickly. Until then, there’s always Google maps:


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Flickr photo by brionv

Video of the Day: SNL jokes about Southwest plane accident

by Mike Barish on

Southwest Airlines has had some troubles recently, including an incident where the roof of one of their planes just, you know, started to tear away from the rest of the aircraft. On this past weekend’s episode of Saturday Night Live, Weekend Update welcomed a flight attendant from that damaged flight. Well, it was the talented Kristin Wiig portraying one of the Dallas-based airline’s employees. Seeing as how the plane landed safely and there was only one reported injury (to a flight attendant, though), we see nothing wrong with cracking a few jokes about the situation. Besides, it’s about time we all got to see those oxygen masks put to use.

Was the skit out of bounds? Did you get a laugh out of it? Let us know in the comments.