Southwest Airlines Pulls Flight Information to Hinder Orbitz

Analysts say move may hurt airline

Southwest Airlines Co. last week fired another salvo in its battle with Orbitz LLC by withdrawing its flight data from Airline Tariff Publishing Co. (ATPCO), a company that supplies airline flight and fare information to travel agents, airlines and travel Web sites, including Orbitz.

"We are doing this to send a clear message that Southwest doesn't want to be associated with Orbitz, a site that we feel seeks to eliminate consumer choice through its exclusive agreements with the carriers it's supported by. It seeks to become a monopoly," said a spokeswoman for the Dallas-based economy airline.

Travel agents and Internet travel sites, including Chicago-based Orbitz, use Dulles, Va.-based ATPCO to obtain flight and fare information but not to make reservations.

From now on, the only global distribution system that will publish Southwest routes and fares is that of Fort Worth, Texas-based Sabre Holdings Corp., an Orbitz rival, the Southwest spokeswoman said. But Southwest doesn't open its live, proprietary reservation system to anyone, she added, so travelers who want to make reservations online will have to go to the Southwest Web site.

A spokeswoman for Orbitz, the online travel agency developed by the five largest U.S. airlines, said Southwest's decision will hurt consumers.

"We were not the only people getting [Southwest's] fares through ATPCO. Non-Sabre global distribution systems were getting their fares on the Internet" and then referring customers to book flights directly with Southwest, said Orbitz spokeswoman Carol Jouzaitis.

"Southwest's decision will ultimately harm consumers. It will now be more difficult to compare fares with other airlines," she noted.

While Southwest is known for going its own way, this move is somewhat bizarre and may hurt the company's image with its customers, said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Mass.

"This whole thing between Southwest and Orbitz is turning into a holy war between the two companies," Harteveldt said. "Southwest has decided to pick up its fares and go home. As a result, Southwest has shot itself in the foot."

In May, Southwest filed suit against Orbitz, alleging that the flight search engine was giving the airlines that support it preferential positioning in search results and was posting circuitous Southwest flight plans in price comparisons against other airlines. Orbitz is financed by Delta Air Lines Inc., Continental Airlines Inc., Northwest Airlines Inc., United Air Lines Inc. and American Airlines Inc. and is supported by 450 other U.S. and international carriers.

Orbitz offered to sit down with Southwest to work out how the airline's flights should be displayed, but Southwest refused, said Jouzaitis. She added that Southwest paid nothing to Orbitz for posting its flight information.

However, Southwest is committed to promoting its flight information on its own site, which accounted for 36% of all of its bookings in the first quarter, the Southwest spokeswoman said. She also said that Southwest doesn't rely very heavily on travel agents for bookings.

Southwest has some legitimate complaints about the flights and fares displayed on Orbitz, Harteveldt said, citing the fact that some Southwest fares weren't as prominent as those of Orbitz participants.

However, Harteveldt said Southwest was also likely concerned about customers seeing lower fares from other airlines, which could tarnish Southwest's low-fare image.

"We suspect that part of Southwest's pulling out of this is they don't want the consumer to realize the emperor has no clothes," he said.

Sabre owns and runs Travelocity.com Inc., which runs one of the leading Internet travel sites and is an Orbitz competitor. Southwest's fares are no longer published on Travelocity's site, however, due to booking problems. Flights confirmed with Travelocity sometimes couldn't be confirmed with Southwest, the Southwest spokeswoman said. A traveler who arrived at a gate with a Travelocity confirmation may not have been booked on the flight in Southwest's system.

In a more positive development for Orbitz, the site managed to pull off a very successful Web launch, in terms of visitors, according to the Nielsen/NetRatings service.

Launched at the beginning of last month, Orbitz attracted 2.07 million unique, at-home visitors during its first month, an increase of 1.9 million over the number of unique, at-home users who visited the travel site in May, the final month of its beta test. That's the highest increase in traffic to a newly launched Web site since Milpitas, Calif.-based NetRatings Inc. began tracking Internet traffic in 1999, said NetRatings spokeswoman Jennifer Fan.

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Troubled Takeoff
The launch of Orbitz has been shadowed by disputes with Southwest.
Summer 2000
April 2001
May 2001
June 2001
July 2001
Government begins antitrust investigation of Orbitz.U.S. Department of Transportation refuses to block Orbitz, saying it isn’t anticompetitive until it does something anticompetitive.Southwest Airlines sues Orbitz over allegedly incorrect flight and fare information.Orbitz site officially launches.Southwest pulls its flight and fare data from ATPCO and thus from Orbitz.

Copyright © 2001 IDG Communications, Inc.

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