REPORT TO CONGRESS: EFFORTS TO MONITOR ORBITZ

In the spring of 2001, the U.S. Department of Transportation conducted an informal investigation of Orbitz, the online travel agency owned by five large U.S. airlines (American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines and United Air Lines), to see whether Orbitz's ownership and management structure, technical and business plans, and proposed operating procedures warranted action under 49 U.S.C. 41712 of the Department's organic statute giving it the authority to prohibit airlines and travel agencies from engaging in unfair methods of competition. The Congress was concerned that Orbitz's airline ownership and its use of a "Most Favored Nation" (MFN) clause in agreements with airline participants could lead to a reduction in competition in the airline and airline distribution businesses. Furthermore, another concern was that the owner carriers and other carriers participating in Orbitz could use it as a vehicle for price and/or service collusion or coordination and thereby reduce competition. This report on the monitoring efforts concerning Orbitz by the Office of Aviation and Internal affairs addressed the following potential concerns: (1) Deviations from plans, policies, and procedures initially proposed in the joint venture's business plan and contained in its charter associate agreements; (2) The extent to which the joint venture has adhered to its commitment to not bias displays of fares or services; (3) The extent to which ties between the airline-owners and the "Most Favored Nation" clause in the charter agreement have resulted in monopolistic or other anti-competitive market behavior; and (4) whether airline-owners of the joint ventures or charter associates have acted in an anti-competitive manner by choosing not to distribute fares through other online distribution outlets.

  • Record URL:
  • Corporate Authors:

    Department of Transportation

    Office of Aviation and International Affairs, 1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Publication Date: 2002-6-27

Language

  • English

Media Info

  • Pagination: 28 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00964167
  • Record Type: Publication
  • Files: NTL, TRIS, USDOT
  • Created Date: Oct 16 2003 12:00AM