Orbitz Sidelined in Airline Bailout Bill

Jerry Chandler The Interactive Travel Services Association (ITSA) is ecstatic that the most recent Congressional bailout of the airline industry discourages support of Orbitz, the airline-owned travel Web site. Orbitz, however, counters that the caution was included solely to benefit one of its compet

By: Jerry Chandler

The Interactive Travel Services Association (ITSA) is ecstatic that the most recent Congressional bailout of the airline industry discourages support of Orbitz, the airline-owned travel Web site.

Orbitz, however, counters that the caution was included solely to benefit one of its competitors.

The emergency funding bill says carriers may use the money as they wish, but then notes the funds should be spent “to the greatest extent possible, to address aviation security and should not be used to support non-security related business entities, ventures, or activities including, but not limited to, ticket agent ventures.”

The package provided airlines with $3 billion in reimbursements for security expenses at airports and on board planes and $100 million to reinforce cockpit doors.

Antonella Pianalto, executive director of the Interactive Travel Services Association, said the legislation stopped short of actually forbidding the carriers from funneling money to Orbitz.

However, Pianalto said, “I think Congress would not be very happy if these funds went to Orbitz.”

Pianalto said the language that emerged from a joint House and Senate Conference Committee, and which became law earlier this month, was added at the behest of some airlines.

“The committee made sure that the wording was such that the airlines had discretion as to how the funding was used,” she said.

In a prepared release, Orbitz countered that the language was “driven by Sen. Patty Murray, D-Wash., who is acting solely in the interest of Expedia one of her large corporate constituents.”

Pianalto said that, while airlines have been slashing service, laying off workers and cutting pensions, “they have been writing large checks to cover Orbitz’ losses.”

In a prepared release, ITSA referred to a 2002 Northwest Airlines’ filing, in which the carrier “recognized $3 million of losses, which represents its share of Orbitz losses.”

“With Northwest owning 15.6 percent of Orbitz, Orbitz’s total losses for its airline owners in 2002 would appear to approach $20 million,” the release said. Orbitz, however, said the filing with the Securities and Exchange Commission is more than a year old and that its competitors are “continuing their smear campaign in a desperate attempt to prevent competition.”

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