Word: orbitz
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...Southwest may make its most determined stand against its brethren. Southwest, which has maintained its rebel streak even as its grown to rival its competitors in size, has filed a lawsuit "to protect itself and its customers from potential harm." From whence the threat? A new travel website, called Orbitz, which is to Southwest the airline industry version of a nuclear weapon...
...prospect of another Travelocity or Expedia that Southwest finds so worrisome, it is who is behind it. Unlike, say, Expedia, which is an independent online travel agent (it's owned by Microsoft) that displays fares provided by all carriers, Orbitz is owned by American Airlines, Continental, Delta, Northwest and United, which alone account for more than three quarters of the total U.S. air travel market. While Orbitz, which is already serving customers ahead of its scheduled launch in June, also includes fares from other airlines, Southwest claims it being treated unfairly on the site, saying that Orbitz is using airline...
...regret that Southwest must take the extraordinary step of legal action," said Southwest vice president Jim Parker. "Most observers believe that the airline industry needs to be more competitive. Orbitz is a step in the wrong direction...
...Expedia and Travelocity fought Orbitz with all the might of their own corporate parents - Microsoft and bookings giant Sabre, respectively - and not just because it's a bit troubling, competition-wise, for a cabal of the Big Five airlines to be cooperatively selling their own version of "competitive fares." It's because Expedia and Travelocity are members of capitalism's longest-standing endangered species: the middleman. They currently charge the airlines a $15 fee for every round-trip ticket, a cost the airlines say - and you can probably believe them - is ultimately passed on to the consumer...
...course, Orbitz won't be charging those fees to the airlines that run it, and the presence of the airlines' own individual bookings sites have already pushed the web middlemen to more profitable - but less popular - services like hotel reservations and car rentals. How long till the airlines start getting in on that act too is anybody's guess. But with fees disappearing and inside player Orbitz set to move in with pricing that's almost sure to be predatory, a likelier question could be whether Expedia's first quarterly profit is the beginning of a very short...