Orbitz says competitors are ganging up

Summary:The online travel agency alleges that a group of companies loyal to travel conglomerate Sabre have joined forces against it.

Orbitz is alleging that a "confederacy" of companies loyal to rival travel conglomerate Sabre has it in for the online travel agency.

It started when Orbitz customers were recently turned away at the airport by Vanguard Airlines, which said the travelers were holding invalid tickets.

The Orbitz customers maintained they had bought the tickets from Orbitz, but Vanguard rejected them, saying Orbitz provided them with erroneous prices.

A public-relations duel ensued, and Vanguard encouraged customers in a news release last week to book their travel arrangements with agencies other than Orbitz.

Chicago-based Orbitz went on to deny it was the one that goofed and said Vanguard was trying to embarrass the online travel agency on behalf of Sabre, a big Orbitz critic and a company that operates one of the largest computer-based reservation systems for travel agents.

Orbitz charged that when Kansas City, Mo.-based Vanguard contracted to have Sabre provide it with travel reservations last April, the airline also "joined a confederation of parties that have aligned to protect Sabre's interests."

In a statement Thursday, Vanguard said it was "baffled" by Orbitz's allegation. Some analysts, too, say they are skeptical of Orbitz's charge.

"For Orbitz to say that there is a confederacy is one of the weirdest things I've heard in my 20 years in this industry," said Henry Hartveldt, a senior analyst for Internet study group Forrester Research. "There is no confederation. In these tough economic times, they both should just fix the problem, stop fighting in the press and go back to work."

The allegations leveled by


Online travel titans in trouble?
Terrell B. Jones, CEO, Travelocity
May 14, 2001
Orbitz go a long way toward underscoring how heated the battle is for control of online travel, one of the few industries doing well on the Web. Competitors in the business are after the $14 billion in airline fares expected to be bought online this year, according to PhoCusWright, a travel research group.

The competition has only intensified since Orbitz's introduction. Backed by five of the nation's top airlines, including American Airlines, Continental Airlines and Delta Air Lines, Orbitz has drawn heavy fire for its cozy relationship with the major carriers.

The Department of Justice is also investigating Orbitz for possible antitrust violations.

A more recent skirmish came last month, when Southwest Airlines pulled its flight information from the clearinghouse that supplies Orbitz. Southwest said it did not feel comfortable providing information to a company backed by its top five competitors.

Fort Worth, Texas-based Sabre also owns Web travel agency Travelocity.com, a main Orbitz rival. Travelocity CEO Terrell Jones was among the first to slam Orbitz and call for government scrutiny of the company.

Is it any wonder that Orbitz might feel a little hunted? When asked if its competitors had joined forces against it, spokeswoman Carol Jouzaitis said, "We will let the record speak for itself."

Besides undergoing intense scrutiny, Orbitz has had to deal with the pain of launching a new and--according to companies that track Web traffic--popular Web site. On the day of its launch, Orbitz saw a damaged fiber-optic cable stall the site for three hours. The privately held company has also wrestled with handling calls into its customer service center, which the company said is understaffed.


  Expedia welcomes competition
Richard Barton, CEO, Expedia
July 2, 2001
Vanguard said Orbitz's new technology was probably at fault for the pricing error. The airline began seeing ticket problems coming from Orbitz almost immediately after its June launch. In the past several weeks, Vanguard said, the problems have increased.

Vanguard, a small carrier that flies to 15 U.S. cities, ignited the public-relations duel after it deduced that Orbitz was responsible for the ticketing troubles. Alan Carr, a Vanguard spokesman, denied that the airline was out to embarrass Orbitz or that it is in league with Sabre.

"It was a customer-relations issue," Carr said. "Orbitz has been displaying some inaccurate fare information about our flights, and we wanted to protect customers. We've had no problems with any of the other travel agencies. Based on our tests we've done, we are confident that it lies on Orbitz's end."

Orbitz defended its technology using the same argument.

"Call and ask our other partners; we have an excellent track record," Jouzaitis said. "We have not been informed by Vanguard about any problem with our system."

Topics: Travel Tech, Fiber

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