Public debate over US online travel agent Orbitz is heating up amid accusations that the web site continues to receive new funding from its airline owners while the same airlines request more US government aid.
US lawmakers as well as Orbitz's main rivals in the travel distribution community are claiming loss-making Orbitz, which hopes to go public next year, is accepting cash amounts over and above the $205 million already contributed by its five airline owners - American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines and United Airlines.
Orbitz declines to comment on suggestions that it has received as much as $25 million in additional money because the company is in the quiet period leading up to its initial public offering.
Orbitz's owners, which benefited from a $15 billion US government bailout in the aftermath of 11 September, have been lobbying Congress to further relieve the industry of an estimated $4 billion in annual aviation security related costs. Congress has gone on a recess without authorising any relief.
The International Travel Services Association (ITSA), a lobbying group representing online travel agents, believes continued assistance to the airlines will make Orbitz "a de facto federally subsidised online travel site". Florida congressman Felix Grucci says he finds it troubling that struggling majors are able to fully fund Orbitz, while US travel agencies face financial collapse because airlines have eliminated commissions.
A preliminary Department of Transportation Inspector General's review of Orbitz has found no immediate reason to fault the company's business practices. A final report is expected shortly. The Department of Justice and a Congressionally mandated travel commission continue to review the site.
Source: Flight International
