Judge Grants Temporary Restraining Order Against American Air
November 22 2010 - 2:37PM
Dow Jones News
A circuit court judge granted a temporary restraining order
preventing AMR Corp.'s (AMR) American Airlines from pulling its
flight listings from Orbitz Worldwide Inc.'s (OWW) travel-booking
website.
A judge for the Circuit Court of Cook County in Illinois said
Friday that American can't remove its flights from Orbitz's
platform until the judge rules on Travelport Ltd.'s request for a
preliminary injunction. The ruling said the parties may reconvene
Nov. 29 to address the situation.
Earlier this month, American said it would pull its flight
listings from Orbitz, beginning Dec. 1, unless the two companies
can agree on how the online-travel agent gets access to the
data.
Traditionally, a global distribution system--such as Travelport
or Sabre Holdings--acts as intermediary between travel agents and
travel providers, facilitating the search and booking of flights.
The GDS charges the airline a fee when a travel agent books a
flight.
Travelport--which owns about 48% of Orbitz and is a privately
held company owned by Blackstone Group LP (BX), One Equity
Partners, Technology Crossover Ventures and Travelport
management--contends American's actions are threatening to disrupt
the current system.
Travelport, which wasn't immediately available to comment
Monday, said earlier this month that American's "action to coerce a
more restrictive model under threat" would violate American's
contractual obligations with Travelport.
Orbitz declined to comment.
GDS companies were established before the Internet to make it
easier for travel agents to access flight-booking information.
Sabre was built by American in the 1960s and was spun off from the
company in 2000. GDS companies remain big players in linking
airlines to high-margin business travelers via travel agents and
corporate accounts.
But airlines--American in particular--have been vocal in wanting
travel agents and online travel sites to share the expenses of
accessing flight listings.
American spokesman Ryan Mikolasik said the court's decision
temporarily delays American's plans to implement the termination of
its relationship with Orbitz, but the temporary restraining order
isn't a final decision and is only intended to give the court and
parties more time to develop and present evidence.
"We are confident that once the court hears this evidence and is
allowed to make a ruling on the full evidence, it will find that
our decision to terminate Orbitz is fully consistent with all of
our contractual obligations," Mikolasik said. "In the meantime, we
will continue to pursue our efforts to bring newer technologies and
lower costs to the distribution of our product."
-By Shara Tibken, Dow Jones Newswires; 212-416-2189;
shara.tibken@dowjones.com
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