Anti-Trust Fears Voiced for Airline Web Site

W A S H I N G T O N, July 20 -- An online travel site funded by five major airlines could benefit consumers if steps were taken to stop it becoming the only source of the lowest air fares, a senior Department of Transportation (DOT) official said today.

The venture has sparked a review by regulators and evoked skepticism that an airline-funded retail travel venture will ultimately benefit consumers.

“Orbitz could potentially benefit consumers and airlines by providing a wider range of fare options, bias-free displays, and reduced booking fees,” DOT Inspector General Ken Mead told a Commerce Committee hearing.

“But red flags raised by competitive issues, such as airlines potentially restricting their lowest fares exclusively to Orbitz, must first be resolved,” said Mead.

Orbitz is owned by UAL Corp.’s United Airlines, AMR Corp.’s American Airlines, Delta Air Lines Inc., Continental Airlines Inc., and Northwest Airlines Corp..

Orbitz has said it will be the most comprehensive source of unbiased travel information on the Web for consumers while benefiting participating airlines by slashing ticket distribution costs.

Critics, including travel agents and competing Internet travel sites, charge that Orbitz will reduce competition and cut them out of selling certain low fares.

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Many Airlines Signing On

Thirty other airlines have agreed to join as affiliates. The site, which hopes to add hotel, car rental and other services, has not been launched for customers yet.

The Justice Department is also reviewing Orbitz’s plans.

Orbitz requires member airlines to provide the venture with their lowest Internet fares. But mindful of antitrust law, the contracts specifically permit members to sell those same fares on their own Web sites or through travel agents and other Internet sites.

Mead and others worry that there is little incentive for airlines to offer their lowest Internet fares outside of Orbitz, since the venture will discount computer reservation fees to participating carriers.