The government is continuing to look into the possibility of anti-competitive
practices at online travel operation Orbitz, but the airline-backed site says
the action is “nothing new” and in fact its success has stimulated
competition.
The U.S. Department of Transportation, which last April signed
off on the launch of the travel site, is now asking Orbitz to provide
more documentation on its business plan and its contracts.
Sixteen consumer and antitrust advocacy organizations had urged the DOT to
block the joint venture.
Now, the DOT’s request also extends to the five airlines that own
Chicago-based Orbitz, its business partners and several competitors,
according to a letter from the agency that was leaked to the Associated
Press.
“We seek to determine whether the terms of participation in Orbitz are
unreasonably restricting competition in the airline and airline distribution
businesses,” said the letter, which was signed by the agency’s assistant
secretary for Aviation and International Affairs, Read C. Van de Water.
Jeff Katz, Orbitz president and CEO, called the DOT action an “informal
study of the online travel industry,” and said that “Orbitz welcomes the
DOT’s comprehensive study … The DOT review is nothing new; in fact in a
previous review Orbitz was cleared of any anti-competitive issues.”
“Orbitz has, in nine short months, energized the competition and compelled
other online travel players to improve their offerings and all travel sites
have benefited through increased consumer acceptance,” Katz said.
Orbitz officially
launched last June and in November, in a mandated report to the
government, said sales
were at an all-time high. However, Dallas-based Southwest Airlines is
suing the company for alleged false advertising and unfair competition.
Orbitz is backed by American, United, Northwest, Delta and Continental.
Online travel agency rivals Travelocity.com Inc. and
Expedia Inc. have complained that Orbitz’ airline owners
withhold some so-called Web fares, the heavily discounted tickets promoted on
their own Internet sites.
The DOT is asking for a month-by-month breakdown of airline ticket sales, the
percentage derived from Web-based fares and which airlines offered them. It
also wants to know what deals if any have been offered in order to obtain
access to Web fares.
On the Web fare issue, Katz said that “Since our launch …Web-only fares
have become available to multiple players in our industry. Orbitz early
success confirms that consumers applaud our approach to offering unbiased,
comprehensive flight information and options.”
“We welcome continued competition in the online agency marketplace and are
confident that this study will reaffirm our pro-competition, pro-consumer
position,” he said.
