American Airlines Sues Orbitz Over Booking System

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NEW YORK (MainStreet) — If you thought American Airlines’ (Stock Quote: AMR) patch-up with Expedia (Stock Quote: EXPE) meant one with Orbitz (Stock Quote: OWW) was on the way, you were mistaken.

Tuesday, American filed a lawsuit against Orbitz and Travelport, the company that operates the site’s reservation system, citing an anti-trust violation for flight bookings.  

The lawsuit goes back to a conflict that started in January when Orbitz refused to adopt American’s Direct Connect system for customers to book reservations with American at lower rates. This led the airline to pull its fares off the travel site.

Expedia, then, pulled Americans airfares off of its sites in an attempt to show solidarity, but later resolved its difference with the airline  by agreeing to use a hybrid of both reservation booking systems.

But as for Orbitz, American alleges the company’s failure to use any system other than Travelport’s – which owns nearly half of Orbitz – is hurting consumers by blocking Web innovation, which could help travelers save and book flights more efficiently.

According to American, Travelport “effectively controls the distribution of fares and other content to a large number of travel agencies and their corporate customers,” and as such, “engaged in anticompetitive conduct to protect its market position from new competition by alternative technologies that are both less expensive and more capable.”

Orbitz argues it’s the airline’s booking system, not its own that poses a threat to competitive prices:  

"American Airlines' baseless claims against Orbitz are the latest in a series of tactics to force Orbitz to adopt an airline ticket distribution model that limits consumer choice and inhibits competition,” the company said in a written statement. “The unfortunate truth is that American Airlines is attempting to deprive consumers of the ability to compare prices across competing airlines.”

As part of the lawsuit, AA is seeking triple damages from lost ticket sales and higher fees, in addition to punitive damages.

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