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.”
