AirTran's several-week exit from Worldspan
late last year further roiled the Orbitz-Worldspan relationship,
and the feuding partners apparently continue to battle over the
terms under which Orbitz can access certain low-cost carriers
(LCCs) through Worldspan.
That issue -- and
whether Orbitz may look to Galileo/Apollo or another GDS if some
LCC fares aren't accessible to Orbitz in Worldspan -- could take on
added importance for Orbitz over the next few months. That's
because low-cost carrier JetBlue is considering re-entering GDSs,
and Southwest also could upgrade its GDS participation, as the
segment fees the GDSs charge airlines plummet.
Contention over LCC
access is a prominent theme in an amended complaint that Orbitz
filed against Worldspan last month in the Circuit Court of Cook
County, Law Division, in Chicago.
Orbitz alleges that
Worldspan "threatens to materially breach" their agreement, which
runs through 2011, by seeking to require Orbitz to "pay separately"
for low-cost carrier access, failing to tally these segments toward
Orbitz's quarterly quotas and refusing to pay Orbitz a contractual
segment fee for these bookings.
The suit says
Orbitz seeks, among other things, a judgment from the court
declaring that LCCs that participate in Worldspan are part of the
Worldspan system and that Orbitz is entitled to unfettered access
and the financial terms that go with booking segments through
Worldspan.
Orbitz claims that
Worldspan considers some of these airlines Limited Connect carriers
or "an optional function or service." Worldspan insists that Orbitz
must agree to new financial terms to access these airlines, the
complaint says.
The suit states
that Worldspan informed Orbitz, after a Jan. 23 announcement that
AirTran would return to Worldspan as part of a Limited Connect
participation program, that the online agency would have to pay a
segment fee to access AirTran flights.
In early December,
when AirTran dropped out of Worldspan, Orbitz turned to sister
Travelport unit Galileo to access AirTran flights; it continues to
use Galileo today.
Despite the Orbitz
contract with Worldspan, which nominally makes Worldspan Orbitz's
exclusive GDS provider, Orbitz uses Galileo under a provision that
gives Orbitz a green light "if Worldspan eliminates a product or
service used by Orbitz and does not replace it with a comparable
product or service on commercial terms no less favorable to
Orbitz."
Today, although
Orbitz accesses AirTran through Galileo's Apollo system, Orbitz
continues to tap into Worldspan for ATA, Spirit and Frontier
inventory under terms that Orbitz apparently considers contractual
and not punitive. ATA, Spirit and Frontier are in Worldspan but are
not part of the Limited Connect program.
Worldspan has yet
to answer Orbitz's amended complaint and "will file a responsive
pleading within the appropriate timeframe," a Worldspan spokeswoman
said.
Orbitz is asking
the state court to determine what the contract calls for as it
relates to the financial terms of access to Limited Connect
airlines.
The parties sued
each other in 2005 in separate jurisdictions, and the matter is now
in state court.
In the amended
complaint, Orbitz also seeks to throw out "unfair contract
provisions."
Orbitz alleges it
was duped into amending the contract because Worldspan hid its
objections to the way Orbitz operated its direct connects with
airlines. The contract also is rife with conflicts of interest, the
complaint alleges, because from 2000 to 2003 Delta, Northwest and
American "owned and controlled Worldspan" and also "maintained
controlling ownership and directorship positions at
Orbitz."
Orbitz seeks an
order precluding Worldspan from pursuing certain claims against
Orbitz, and Orbitz seeks $50,000 in direct and consequential
damages plus punitive damages.
For its part,
Worldspan seeks damages of more than $50 million from Orbitz,
alleging that Orbitz improperly accessed Worldspan seat-map data
for direct-connect bookings and improperly used the services of two
GDSs, Galileo and ITA Software.
To contact
reporter Dennis Schaal, send e-mail to [email protected].