DALLAS -- Southwest Airlines filed suit against Orbitz, alleging it
provides misleading and inaccurate information about Southwest
flights and services and improperly uses Southwest service mark
registrations.
Southwest is seeking an injunction against Orbitz's alleged
"false and/or misleading statements," its misuse of Southwest
federally registered service marks and is seeking monetary
damages.
Although Southwest is based here and Orbitz is in Chicago, the
suit was filed in the U.S. District Court, Central District of
California.
The suit stated that Orbitz conducts substantial business within
the court's jurisdiction, including flights originating from and
arriving at airports in Los Angeles, Burbank, Ontario and Long
Beach, Calif.
Specifically, Southwest alleged that Orbitz -- which is carrying
out a beta test and merely displays Southwest flight and fare
information without a booking capability -- presents Southwest fare
information as the carrier's lowest fares when Southwest offers
lower fares.
Orbitz does not present Southwest's lowest fares, including the
carrier's Anniversary and Click 'N Save fares, the suit said.
"Many statements on the Orbitz interactive Web site lead the
public to believe that the lowest available airfares can be found
on Orbitz's Web site, when in fact, lower fares can be found
elsewhere," the suit said.
Southwest also contended that Orbitz falsely indicates that
Southwest offers circuitous routes and connecting flights with
overnight layovers.
In addition, the Southwest litigation is critical of Orbitz's
claim that it is "supported and endorsed by the major U.S.
airlines."
"To contrary, Southwest (a major U.S. airline) does not support
or endorse the Orbitz Web site and does not want to be associated
with the Orbitz Web site," the suit said.
Southwest also takes umbrage at the Orbitz statement that
"tickets for [Southwest] cannot be purchased on line" when, in
fact, they can be booked on www.southwest.com.
The suit said that Southwest notified Orbitz on April 19 that
the carrier objected to the "confusing, misleading and false
information" and demanded that Orbitz "cease and desist."
On May 1, according to the suit, "Orbitz responded by making
certain admissions concerning the conduct complained of by
Southwest and refusing in numerous material respects to comply with
Southwest's requests..."
A statement by Southwest in conjunction with publicizing the
suit said: "Southwest was forced to take legal action because the
airline megasite known as Orbitz has opened for business in spite
of the fact that the Web site is currently under review by the U.S.
Department of Justice."
Southwest alleged that Orbitz's actions amount to unfair
competition and do the carrier significant harm.
In response to the Southwest suit, Orbitz has taken several
steps to appease the carrier's concerns, including removing the
Southwest logo from the Orbitz site, and in a letter to the
Dallas-based carrier a day after the suit was filed, Orbitz called
on Southwest to "begin a productive dialogue for our companies'
mutual benefit and the benefit of consumers."
Orbitz also has changed text on www.orbitz.com to clarify that Southwest
flights cannot be booked on line on Orbitz, said Orbitz vice
president of corporate communications Carol Jouzaitis.
In complying with what it said were three of Southwest's five
concerns, Orbitz also indicated in the letter that it "updated our
software to make it more consistent with restrictions on booking
tickets from Dallas' Love Field."
In the letter from Orbitz general counsel Gary R. Doernhoefer to
Southwest associate general counsel Deborah Ackerman, Orbitz
emphatically stated that it will continue to display Southwest
flights and fares on www.orbitz.com because it legally obtains
these published fares from various clearinghouses.
Regarding the Southwest contention that Orbitz is misleading the
public by giving the impression that is displaying Southwest's
lowest fares, Jouzaitis said Orbitz would be glad to display
Southwest's lower Web fares, but Southwest has refused to provide
them to Orbitz.
Orbitz chief executive officer Jeffrey Katz has consistently
praised Southwest's customer service record and its experience in
lowering distribution costs. It is no secret that Orbitz has
unsuccessfully wooed Southwest as an Orbitz charter associate -- a
status that would give Orbitz the ability to make Southwest flights
bookable on Orbitz and give it access to Southwest's Web-only
fares.
In its bid to drive more bookings to its own site, Southwest,
which participates in Sabre and is bookable there, recently removed
its booking capability from Travelocity.com, which is majority-owned by
Sabre.
Travelocity had been the only site where Southwest was bookable
other than Southwest.com.
Jouzaitis said Orbitz's practice of showing Southwest flights
with multistop combinations is consistent with the methodology of
the ITA Software search technology that Orbitz licenses.
That software produces search results with millions of
combinations as it attempts to show consumers all possibilities in
what is said to be an unbiased manner.
Orbitz had been using the Southwest logo as it uses logos from
other carriers -- on tiles that link to Southwest flights and fares
when search results are produced.
Presently the tile is there with the flights and fares, but the
logo is gone.
Orbitz said in the letter to Southwest that it will continue to
make changes to the site prior to its projected June launch.
On May 5, the Orbitz home page still said -- and Southwest
objected to this wording in its suit -- "Supported and endorsed by
the major U.S. airlines." It also said: "The most low fares."
The Chicago-based airline site intends to continue displaying
Southwest flights and fares, even as it hopes to work out its
differences with Southwest.
"To omit the fares and flights of the fourth-largest U.S.
carrier would be inconvenient to consumers," Jouzaitis said.
Orbitz, which is owned by American, Continental, Delta,
Northwest and United, is in beta mode where some 70,000 beta users
have booked some $1 million in travel in the last two months, the
company said last week.
GET MORE:
For the full text Southwest's legal filing and other info, click here.
For Orbitz' letter to Southwest, click here.