American Airlines and Orbitz tangled in antitrust battle

American AirlinesThe 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.

Orbitz listens to business travelers, goes mobile

OrbitzWhen you’re out on the road for your company, wouldn’t you rather use a mobile device to book your trips and get information? Well, the travel industry is catching on.

Orbitz for Business, the division of Orbitz that caters to laptop-toting folks, just announced that it has launced an “end-to-end mobile solution” that the business travel community can use to book their flights, hotels and such from their smartphones via a mobile-optimized website. This could make life a lot easier for road warriors who don’t book until the last minute … or look up hotel details until they are en route to the airport.

“Business travelers increasingly want to use mobile devices to search and book trips that adhere to their companies’ travel policies – we do not believe a comprehensive, end-to-end solution has been available until today,” said Frank Petito, president, Orbitz for Business. “The Orbitz for Business mobile solution enables travelers to plan and purchase air, hotel and car travel through a streamlined, intuitive interface optimized for mobile devices. Equally important, the solution was built to support the policy, control and compliance requirements of corporate travel managers and their programs.”
So, what does this new solution do? The company said it allows users to make new reservations, track their trips and itineraries and watch for flight statuses and updates. It can also be used in accordance with a company’s travel policies … always important when someone is approving your expenses.

What really makes this development interesting is that business travelers have been leaning in this direction. In a Deloitte report on business travel back in November, we learned, “Twenty-six percent of respondents have downloaded a hotel app to a device, with 54 percent of them using it ‘primarily to book a room.’ “

See, someone’s listening!

Top 10 travel spots in the United States

travelSo, Orbitz noted when we like to travel … but where do we go? The top 10 destinations in the country were mostly predictable, with big tourist-magnet cities dominating the list. There were a few surprises, according to the information supplied by Orbitz: Boston, for example, didn’t make the list, after having ranked ninth in 2009. Los Angeles, fifth in 2009, also fell off in 2010. New Orleans and Honolulu debuted last year.

In the top 10 U.S. destinations last year, average daily hotel rates rose, yet some spots, like Las Vegas and San Diego, still offered great bargains, with rates well below 2008 levels still.

So, which cities are among our 10 favorites? Let’s take a look below!

1. Las Vegas, Nevada: Vegas was hit hard by the financial crisis – expect to see some deals there for a while

2. New York, New York: how can the Big Apple not be an ongoing favorite?

3. Chicago, Illinois: the top city in the Midwest just had to make the list!4. San Francisco, California: forget Los Angeles, this is the place to see out west

5. San Diego, California: again, this is a great alternative to Tinseltown

6. Orlando, Florida: remember that there’s more to Orlando than the theme parks

7. Honolulu, Hawaii: if you’re going to spend some time on the beach, do it right

8. New Orleans, Louisiana: it may have taken a while, but the recovery following Hurricane Katrina is definitely under way

9. Washington, DC: the allure of the nation’s capital can never be resisted

10. Miami, Florida: where else can you see and sample so many great bodies in one place? You have to check this out!

[photo Fabrizio Monaco via Flickr]

The five busiest air travel weeks of 2010

So, when did we hit the road last year? There are some times of year that are more hectic than others, and we all know to avoid airports when we can. Yet, there are some weeks that bring crowded terminals even when we wouldn’t expect it. We all know the insanity of flying the day before Thanksgiving, but there are other time that can be brutal, as well.

Looking back on 2010, Orbitz has taken a look at the toughest air travel weeks of the year. Some of the results may surprise you.

1. Christmas week: this isn’t all that surprising, as we all want to be with friends and family at this time of year. The busiest week of the year to hit the road in 2010 was December 19 – 25.

2. The first week of August: it’s the last chance to go on vacation before settling into the reality that school is right around the corner. This week (August 1 – 7), you get that last taste of freedom – well, your kids do – before it’s back to helping out with the homework.3. The fourth week of June: as August is the last chance, June 20 – 26 is the first chance to get the kids on a plane after school has ended for the year. If you hit the road at this time, needless to say, you won’t be alone.

4. The third week of June: let’s face it – some schools let out earlier than others! June 13 – 19, therefore, is another popular week.

5. Spring break: the third week of March (March 14 – 20) is a popular vacation break for colleges and some high schools. Time to lick tequila off a hottie’s tight stomach … enjoy!

[flickr photo by UggBoy♥UggGirl]

Judge blocks Sabre, gives American Airlines a break

American AirlinesI guess it would make sense for American Airlines to turn to litigation. After all, this approach worked well against Orbitz.

Here’s the situation: the battle between airlines and online travel agencies escalated from the beginning of November – with American’s announcement that it would pull out of Orbitz – through the new year. The latest move was by global distribution system Sabre, which has made it more difficult for American’s fares to be found. Along the way, Expedia dropped American in a defensive move, and Delta pulled out of three smaller booking sites: CheapOair, OneTravel and BookIt.

The decision by Sabre to “demote” American Airlines had obvious business implications for the carrier, which is likely why it sought relief in the courts. As a result of a hearing held yesterday, Sabre has been blocked from limiting the visibility of American Airline flights, but there’s clearly more to come.

In addition to making it more difficult for customers to find American’s flights, Sabre also increased the fees it charges American, which would lead to an annual cost of $157 million for the airline.

Sabre maintains that it was within its contractual rights, according to an Associated Press report, while American believes the move was anti-competitive.