Word: orbitz
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Barton was working for Microsoft in 1994 when he started what has become the Web's biggest travel agency. The site is battling, in the marketplace and among regulators, against Orbitz, which is owned by a group of major airlines. And so far Expedia has outhustled the newcomer, mainly by vastly improving its profit margins on hotel bookings. It also inked a deal with Ticketmaster and bought a custom-vacation wholesaler as well as an off-line business-travel agency. Already the top site in Britain and France, Expedia says it will invade Asia next year. --By Julie Rawe. With...
CORRECTION In the June 10 story "Cheaper Tickets," Time incorrectly described contracts between online travel agency Orbitz and its participating airlines. Those contracts do not prevent the carriers from selling their discounted fares on other travel websites...
Critics of Orbitz focus on its unique arrangement with airlines. The website's "most-favored" clause requires all 42 participating airlines to give only Orbitz their lowest fares. But according to smaller carriers that are part of Orbitz, the website often subtly undermines that arrangement by displaying inaccurate fares for a small airline or showing a major carrier's entire fare listing first. Southwest Airlines and JetBlue Airways, two successful low-cost carriers, are so concerned that Orbitz is structured to favor their big competitors that neither allows tickets to be booked on Orbitz...
...five major-airline owners of Orbitz claim they formed the website to reduce the high cost of booking air travel through traditional computer reservation systems, and they recently eliminated commissions to travel agents. A Travelocity spokesman points out, however, that Orbitz's owner airlines are paying the website a fee of about $14 a ticket--roughly twice as much as Travelocity charges. "Orbitz's special provisions have made the playing field for airline tickets severely uneven," says Antonella Pianalto, head of the Interactive Travel Services Association. Orbitz counters that other websites favor certain carriers by charging them lower fees...
...industry will bring in $64 billion by 2007. But some online travel agents aren't sure they will make it that far. "Ironically, while the number of users of online services is growing, we and other agencies are effectively being foreclosed from the sale of domestic airline tickets by Orbitz," says OneTravel.com president Michael Thomas. Better buy those tickets today...