Airline Industry Study Defends Orbitz Project

"New entrants in travel distribution are being met with substantial opposition from the old guard and from leaders in the online travel marketplace," the report says. "More specifically, the agency community is opposing consumer-direct distribution by travel suppliers, and in particular, attempts to aggregate multiple suppliers onto a single site." Published by Global Aviation Associates, the report accuses the travel-booking industry of mounting a concerted and well-funded lobbying push against Orbitz, in order to protect its profit margins. The report "does restate the idea that Orbitz is bringing some needed competition" to the industry, Orbitz spokesperson Stacey Spencer said today. But travel agents haven't been the only Orbitz detractors. Since news of the airline industry joint Internet venture first surfaced in 1999, consumer advocates, travel industry groups and regulators have expressed concern about the proposed project. A collaborative effort owned jointly by American Airlines, Delta Air Lines, Continental Airlines, Northwest Airlines and United Airlines, Orbitz intends to offer a one-stop-shop for online ticketing. By obscuring the need for travel "middlemen" Orbitz could squeeze other competitors out of the market, Orbitz detractors contend. The Orbitz-funded report goes on to accuse operators of travel industry "global distribution systems" (including Travelocity.com owner Sabre Inc.) of maintaining artificially high ticket-booking prices, in a bid to pad their own profits. The underlying costs for running those systems, which coordinate ticket sales across huge networks, have dropped as prices for computer technology and telecommunications services have fallen. Still, prices associated with global distributions systems (GDS) actually have increased, the report said.