American Airlines won the first round of its legal battle with technology corporation Travelport on Monday when a US court lifted a restraining order on the carrier, allowing it to pull all fares from online travel retailer Orbitz.
The airline withdrew from Orbitz immediately. The judgment caused dismay among consumer and corporate travel groups in the US and American Airlines’ action was condemned not just by Travelport but by rival global distribution system (GDS) Sabre.
However, American welcomed the ruling, a spokeswoman saying: “We applaud the court’s decision. It is important for American to be free to . . . distribute its products in a way that does not result in unnecessary costs.”
Travelport insisted it would continue to fight the case and in a statement said: “Travelport remains confident it will ultimately prevail.”
The outcome will have implications for leisure and business travel agents, GDSs and online retailers, holidaymakers and business travellers, as other airlines assess the extent of American’s success in driving bookings through its own Direct Connect facility.
UK consumers and travel agents will pay an immediate price for the row after American imposed fees on bookings made through the Galileo and Worldspan GDSs owned by Travelport on Monday.
This followed Travelport’s withdrawal of discounts on its charges to American Airlines for appearing on the GDSs. Travel agents use GDSs to access fares and book flights on most airlines except budget carriers like Ryanair.
The fees, which American calls a Booking Source Premium, add £4.52 to a fare booked through Galileo and £6.24 through Worldspan. The carrier insists agents should pay the charge and says it will issue automated debit memos (ADMs) in February.
But Travelport is displaying the fees on its GDSs and adding them to the fares agents charge to consumers. Rival GDSs Sabre and Amadeus do not carry the charges.
However, Sabre senior vice-president Chris Kroeger said: “We oppose American’s efforts to impose a costly and unproven system on travel agents and travellers. We strongly agree with industry and consumer groups who believe American’s actions will make it much harder and more costly for agents and consumers to easily comparison shop among airlines, which will result in increased prices.”
Travelport and American Airlines traded insults over the past few days, with Travelport dismissing the carrier’s fees as “wholly arbitrary” with “no discernible relation to what Travelport charges [the airline]” and American labelling the GDS owner as being “deceptive and misleading”.
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