Five California-based travel agencies are suing major U.S. airlines and online travel site Orbitz Inc. for anti-competitive practices and have asked a federal judge to certify their lawsuit as a class action.
Their antitrust suit claims travel agents are going out of business "by the carloads" because airlines have cut commissions and steered consumers to Web-only fares that are sold on the airlines' own Internet sites. The plaintiffs filed the suit this year in U.S. District Court in Los Angeles, and last week sought class-action status.
The lawsuit asks that travel agents be compensated for the commissions they would have been paid for selling tickets over the last four years if airlines hadn't kept shaving their fees, all the while pushing travelers to book via the Internet.
No damages were specified. Plaintiffs' attorney Max Blecher said that if more agencies were to join the suit, their claims for back commissions could be "well in the billions" of dollars.
This year, airlines stopped paying commissions to agents booking domestic flights, drastically thinning the ranks of the nation's traditional travel agents and forcing surviving agencies to charge fees to customers for such routine services as making reservations.
"They have to do something, because they need relief," said Tom Parsons, who runs Bestfares.com, a travel Web site. "They're basically saying, 'Let us have fair access.' To them, the airlines are going to make them extinct."
The lawsuit also seeks to dissolve Orbitz. The online site is owned by the five biggest carriers: AMR Corp.'s American Airlines, UAL Corp.'s United Airlines, Delta Air Lines, Northwest Airlines and Continental Airlines, though only American, United and Delta are named in the suit.
The carriers maintain that they formed the site to guard against the rising dominance of Expedia Inc. and Travelocity.com -- the two biggest online travel agencies.
Orbitz's online rivals as well as traditional travel agents claim Orbitz's arrangement with the carriers gives it exclusive access to its owners' lowest rates, severely curbing competition. Orbitz says it saves airlines about 30% on each transaction compared with other travel agents or Web sites.
"Orbitz is destined to become a monopoly," Blecher said. "Its arrangement to offer deeply discounted seats from the largest airlines, seats that aren't available to other travel agencies, amounts to nothing short of collusion."
