Tags: Orbitz | Shares | American | Fares

Orbitz Shares Sink as American Pulls Fares in Dispute

Tuesday, 26 August 2014 03:11 PM EDT

American Airlines Group Inc. sent shares of Orbitz Worldwide Inc. tumbling the most in three months after the carrier pulled fares from the online reservation service in a dispute over a new contract.

The move is effective immediately for data from the company’s American Airlines unit. Fares from merger partner US Airways will disappear Sept. 1 after its accord expires, Fort Worth, Texas-based American said Tuesday in a statement. Orbitz shares fell as much as 8.5 percent.

Orbitz, which has been listing American flights and fares without a contract, depends more on U.S. airline ticket sales than other online travel services like Expedia Inc. and Priceline Group Inc., said Manish Hemrajani, an Oppenheimer & Co. analyst. American, the world’s largest airline, said it expects “minimal disruptions” for customers.

“It’s key for Orbitz more so than the others,” Hemrajani said in an interview. “It’s important to them to have American on their side. I wouldn’t imagine they’d be comfortable in letting them go.”

The loss of American may affect about 1.8 percent of Orbitz’s revenue this year, he said. The company had sales of $847 million in 2013. American also withdrew data from Orbitz in a 2010 dispute, and the online service provider’s shares “severely underperformed” the stock market and competitors during that time, the analyst said.

Other Options

“We have worked tirelessly with Orbitz to reach a deal with the economics that allow us to keep costs low and compete with low-cost carriers,” American President Scott Kirby said in the statement. “While our fares are no longer on Orbitz, there are a multitude of other options available for our customers.”

About 75 percent of online bookings occur on carriers’ own websites, Hemrajani said.

Telephone and e-mail messages left for comment with Chicago-based Orbitz weren’t immediately returned. The change primarily affects Orbitz.com and Cheaptickets.com.

Tickets purchased through Orbitz remain valid, although changes to existing reservations now must be made on each airline’s reservation sites, according to American.

Orbitz’s shares were down 5.3 percent at $7.98 during the last hour of trading in New York, after trading as low as $7.71 in their biggest intraday drop since May 20. American slid less than 1 percent to $39.18.

American and Orbitz in April 2013 settled a legal dispute over competing systems to provide fare and flight schedule data to online reservation systems. Terms of the lawsuit settlement weren’t disclosed.

The airline also settled similar litigation with Sabre Holdings Corp. and Travelport LP in which it accused the companies of trying to block its entry into the electronic flight-data and reservations market.

© Copyright 2025 Bloomberg News. All rights reserved.


InvestingAnalysis
American Airlines Group Inc. sent shares of Orbitz Worldwide Inc. tumbling the most in three months Tuesday after the carrier pulled fares from the online reservation service in a dispute over a new contract.
Orbitz, Shares, American, Fares
428
2014-11-26
Tuesday, 26 August 2014 03:11 PM
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