AMR Corp's American Airlines said on Tuesday it would no longer sell flights on online travel agency Orbitz Worldwide after a ruling from an Illinois court.
The carrier said it would stop displaying and selling fares through Orbitz and Orbitz for Business. It said in a statement that American tickets were available through other outlets, including its own website and Priceline.com.
On Tuesday, Judge Martin Agran of the Circuit Court of Cook County denied a request for an injunction filed by Travelport LP, which owns a 48 percent share in Orbitz, seeking to prevent American from pulling its flights.
American had warned earlier this year that it would stop selling tickets on Orbitz on December 1 if Orbitz did not use a direct link to the airline's inventory. A court in November temporarily blocked that move.
In the near term, we believe that if American Airlines removes its flights from our websites, most of the impacted ticket volume will be replaced by other suppliers, and we will continue to earn most of the associated ancillary revenue, Orbitz Chief Executive Barney Harford said in an interview.
He said Orbitz was continuing to seek an arrangement with American to distribute the carrier's tickets on Orbitz sites.
Revenue earned on American Airlines tickets and related products such as destination services, car, hotel and insurance booked on Orbitz sites accounted for about 5 percent of total revenue for the nine months ended September 30, the online travel company said. For the nine months, Orbitz reported net revenue of $575.1 million.
Harford said Orbitz had not heard from other major airlines wanting to take actions similar to American's. That is not a major concern of ours at this stage, Harford said.
American has long said it needs to cut distribution costs and contends the model used by online travel agencies prevents it from offering the lowest possible fares.
In today's competitive marketplace, it is important for American to be free to customize its product offerings to improve the customer experience as well as distribute its products in a way that does not result in unnecessary costs, American said in a statement hailing the ruling.
Shares of Orbitz closed up 3.5 percent at $6.44 on the New York Stock Exchange on Tuesday while AMR closed up 1.8 percent at $8.05.
The case is Travelport LP vs. American Airlines, Circuit Court of Cook County, Illinois, County Department, Chancery Division, No. 10-CH 48028.
(Reporting by Karen Jacobs, additional reporting by John Crawley in Washington, editing by Matthew Lewis)