Travelport is taking the legal route to protect Orbitz from being sidelined by American Airlines, with confirmation that papers were filed in a US court late on Friday 5 November.
And, 1,000 miles away in Fort Worth, Texas, American Airlines filed a legal action against Travelport, as well.
Documents sent to the Circuit Court of Cook County in Illinois by Travelport (48% owner of Orbitz), relate to a threat by American Airlines to block Orbitz from issuing the airline’s tickets from December 1 2010.
The dispute revolves around American’s demand that Orbitz connect to AA Direct Connect for flight inventory and ancillary services, and consequent distribution economics.
American wants to take control of its own merchandising through AA Direct Connect rather than have it handled by third parties, including OTAs and GDSs.
But while both parties said last week that they were still negotiating over the issue, rumours yesterday suggested Travelport would be willing to head to the courts to block American’s decision.
Quoting from the court papers filed late yesterday:
“This case is about AA putting its corporate knee on the neck of one of Travelport’s largest customers, Orbitz Worldwide, to force a result that violates AA’s contract with Travelport.”
In short, if American cuts out Orbitz then Travelport stands to miss out on GDS fees, regardless of whether Orbitz is one of its siblings or not.
However, the papers continue:
“The actual controversy concerns whether AA can make good on its threat to discontinue Orbitz’s ability to book AA tickets, and to prohibit access to AA’s fares, pricing, availability, and other airline information, without breaching Travelport’s contracting rights.”
Travelport has an existing distribution agreement with American going back to 2006.
In reaction to the Travelport suit, an American Airlines officials says: “These claims over the contract action we had taken are groundless in our view, and we are seeking a declaratory judgment to protect our existing rights. Given that this litigation remains pending, we don’t intend to comment further at this time.”
Messy indeed! Admittedly I have not been following this dispute very closely and so therein perhaps lays the root of my confusion about this last move. I read (in Tnooz earlier article) that AA is threatening to revoke Orbitz authority to ticket American flights. Is it not true that “ticketing” has very little to do with Travelport/AA content contract referenced above? Content contracts are relative to fares, availability & booking – but not ticketing, correct? If so, this seems like just a PR move by Travelport to give the issue negative press around AA. Perhaps I have it wrong? Thanks in advance for the clarification.
Not sure though whether travelport do the same thing in India, given that it is facing similar pressure from one of india’s largest airline, Kingfisher.