American Airlines Leaves Orbitz(nytimes.com)
nytimes.com
American Airlines Leaves Orbitz
http://www.nytimes.com/2010/12/22/business/22air.html?src=busln
6 comments
Actually, there's a much better writeup in the Chicago Tribune: http://www.chicagotribune.com/business/ct-biz-1222-orbitz-aa...
Good for AA. Cutting out middlemen is what the Internet is for, and Sabre takes a healthy cut. Good luck. I'm looking forward to cheaper rates when the other airlines pile on. For those that didn't read the Chicago Tribune article, AA will let Orbitz sell their tickets only if they talk directly to AA, but not through Sabre.
Your comment is especially amusing given the lineage of Sabre. In fact, wasn't the original internetwork-facing version of Sabre called Saabre?
Surprising that it's taken them this long to leave. What company enjoys being listed alongside vastly superior and less expensive competitors?
I'm not seeing how this will work out for AA. I understand that it's monetarily more efficient for them not to have a middleman but I thought a good % of sales were directly from customers (not always through agents). Do they actually expect customers to go back to the days when you'd try to compare prices across 5 airline sites?
I think they hope that
1. Given the choice between just using Orbitz and not seeing AA flights at all, and using two sites instead of one, customers will choose to use two sites instead of one.
and then, after they've got used to that,
2. Given the choice between just using Orbitz+AA and not seeing (say) US Airways flights at all, and using three sites instead of two, customers will choose to use three sites instead of two.
and so on, until eventually
N. Orbitz goes out of business because it's no longer getting enough use.
and/or
N'. Customers give up doing comprehensive price comparisons.
at which point
N+1. All the airlines (including AA) get to increase their prices.
1. Given the choice between just using Orbitz and not seeing AA flights at all, and using two sites instead of one, customers will choose to use two sites instead of one.
and then, after they've got used to that,
2. Given the choice between just using Orbitz+AA and not seeing (say) US Airways flights at all, and using three sites instead of two, customers will choose to use three sites instead of two.
and so on, until eventually
N. Orbitz goes out of business because it's no longer getting enough use.
and/or
N'. Customers give up doing comprehensive price comparisons.
at which point
N+1. All the airlines (including AA) get to increase their prices.
Does this affect ITA directly at all? I will admit I am not clear on the relationship between Orbitz and ITA.
wasn't orbitz funded in part by the big airlines a decade ago?
http://en.wikipedia.org/wiki/Orbitz
"Orbitz was the airline industry's response to the rise of online travel agencies such as Expedia and Travelocity, as well as a solution to the continued increase in Global Distribution System (GDS) fees. Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines, subsequently joined by American Airlines, invested a combined $145 million to start the project in November 1999. It was code-named T2 — some claimed, meaning "Travelocity Terminator" – but adopted the brand name Orbitz when it commenced corporate operations as DUNC, LLC (the initials of its first four founding airlines) in February 2000.[4] The company began Beta testing early the next year, and Orbitz.com officially launched in June 2001"
"Orbitz was the airline industry's response to the rise of online travel agencies such as Expedia and Travelocity, as well as a solution to the continued increase in Global Distribution System (GDS) fees. Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines, subsequently joined by American Airlines, invested a combined $145 million to start the project in November 1999. It was code-named T2 — some claimed, meaning "Travelocity Terminator" – but adopted the brand name Orbitz when it commenced corporate operations as DUNC, LLC (the initials of its first four founding airlines) in February 2000.[4] The company began Beta testing early the next year, and Orbitz.com officially launched in June 2001"