LYCOS RETRIEVER
Orbitz: American Airlines
built 618 days ago
Orbitz is ... developing a system called Direct Connect that will book seats directly, bypassing the four major CRSs. This will put competitive pressures on the existing CRSs to lower their fees. This alone is worth the cost to the airlines of setting up Orbitz, which was around $150 million. Booking fees are 2.7% of the cost of the average ticket, a total of $2 billion per year. The arithmetic shows that a reduction in booking fees of only 4% would repay the airlines’ costs for Orbitz in a year.
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Orbitz has done a steep climb-out since its launch a few years ago. Founded by American, Continental, Delta, Northwest and United, Orbitz has quickly elbowed its way into the Big 3 of online travel sites.
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Make no mistake, people will be clicking onto Orbitz once it goes live. People might be heading over there just to see what five airlines and US$100 million can produce these days.
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