LOS ANGELES -- Six travel agencies filed a lawsuit against the big
three airlines and Orbitz in the U.S. District Court here, seeking
a 10-year injunction that would dissolve Orbitz, reinstate
commissions, rescind ARC's recent travel agency fee increases and
grant other relief.
Filing the case as a class-action antitrust suit, the six
agencies, five in California and one in Ohio, alleged that
American, United and Delta have "monopoly power" in air
transportation and conspired to leverage that power to monopolize
distribution by reducing commissions, creating Orbitz, investing in
Hotwire, and by other actions.
Cited as "non-defendants who engaged in concerted action" were
Orbitz co-owners Northwest and Continental, plus ARC and Hotwire, a
discount Web site owned in part by the Orbitz owners (excluding
Delta).
ARC is alleged to have carried out directives from Orbitz's
airline owners to "raise the cost of being a travel agent" by
increasing agency fees and imposing "cumbersome and costly"
requirements on agents.
The plaintiffs seek class-action status for agents with physical
locations that held ARC accreditation during the last four years;
the class would exclude Web-based retailers such as Travelocity,
Expedia, Cheaptickets, Priceline, and other similar firms.
In addition to the relief noted above, the suit seeks monetary
damages and a court order that the defendant airlines make
available to all agents "every fare, every promotion, and every
incentive offered through ... any other means of distribution."
As an alternative to dissolving Orbitz, the complaint said the
Court could require participating airlines to divest their
ownership, or rescind portions of the Orbitz contract with
participating airlines, including the so-called "most favored
nation" clause that obligates certain airlines to make their lowest
fares available on Orbitz.
The plaintiffs are Wilson Travel of Newark, Ohio, Albany
(Calif.) Travel, and four other California agencies: Travel Galore
of Encino, International Travel Bureau in San Francisco and Jas
Travel and Miyamoto Travel Service, both of Sacramento.
The airlines declined to comment but Orbitz said, "The suit has
no merit and we're confident it will dismissed a the appropriate
time."
An Orbitz spokeswoman declined to comment on the litigation,
saying the company had not been served with the suit.