In its efforts to become the premier site for online travel
shoppers, Orbitz is offering a new cruise and vacation promotion
that includes discounts on United Airlines, an arrangement it hopes
will be just the first to involve its airline owners.
Orbitz, which was created by five major domestic carriers
including the bankrupt United, is offering the travel incentive
through Jan. 20 as a part of a “wave season” promotion. It is the
first time the Internet site has paired cruise and vacation
packages with airfare discounts.
Customers are given coupons worth a total of $100 or $300,
depending on the length of their cruise or vacation packages, that
can be used for tickets anywhere that United flies.
Although the travel coupons are good through Dec. 15, the future
of the bankrupt airline itself is uncertain as it struggles to
reorganize under Chapter 11.
“We don’t expect there to be any changes,” said Barbara
Buckridge, the vice president of transportation for Orbitz. “If
something were to happen, United would have guidance in terms of
protection just as in the terms of their tickets.”
Regardless of United’s future, Orbitz plans to work with all of
its airline owners on similar promotions as it expands its online
products to encompass more categories. For example, deals involving
rental cars to hotels to getaways all potentially could be packaged
with incentives to fly.
“A lot is under development,” said Buckridge. “We are always
trying to pull together from our resources. We have many different
opportunities to work with the airlines.”
Since Orbitz was launched in 2001, its airline ownership has
raised concerns among competitors about the company’s ability to
dominate the distribution and pricing of airline tickets. The
anti-trust question has involved Orbitz in lawsuits and government
For competitors, Orbitz’s business practices are questionable
because of its ability to use its own suppliers to create packages
that no one else can offer.
“It’s unfair competition,” said Pat Funk, vice president of
operations for the Association of Retail Travel Agents (ARTA). “Our
average member couldn’t begin to touch this type of thing.”
On the whole, Orbitz is just one part of an industry radically
changed by technologies that allow suppliers to make transactions
more directly with buyers, ultimately lowering the price of travel
and making it difficult, if not impossible, for traditional
distribution systems to compete on price.
So far Orbitz has cleared anti-trust investigations by the U.S.
Department of Transportation, which last fall rejected charges by
the American Society of Travel Agents (ASTA) that Orbitz engaged in
anti-competitive practices. Last month a federal audit cleared the
company of similar allegations, concluding that Orbitz had not
gained enough of a market share to control online pricing. Orbitz
is the third most used travel site, behind Expedia and
In another challenge to Orbitz, a federal judge in Los Angeles
is expected to rule this month on whether a lawsuit filed by five
travel agencies can be pursued as a class action.