Orbitz: Corp. Fares And Reporting Available, Aqua Deal Final

Orbitz CEO Jeff Katz today said the company's airline owners can file corporate negotiated rates in and derive booking reports from the Orbitz Web site for specific clients if they so choose.

"Since we don't have corporate relationships, we've made it known to the airlines that reporting exists for them and their clients, " Katz said. "Many have asked about it, but no one is using it yet. You'll never see an Orbitz sales force talking to travel managers, but we know some percentage of businesses use it. We can also display negotiated rates integrated with public rates if a corporation wants us to do so and they have an arrangement with their preferred airlines."

Katz was speaking with Business Travel News on a conference call with Santa Ana, Calif.-based Aqua Software president Mark Ferguson and Englewood, Colo.-based Navigant International president Thom Nulty to discuss a now-finalized agreement between Aqua and Orbitz (BTNOnline, May 3).

The deal, which is exclusive for less than a year, will bring Orbitz's content to business travel agencies using Aqua's mid-office automation, starting in about 90 days with Aqua owner Navigant. Officials said the arrangement will offer Orbitz fares alongside published and negotiated rates from any global distribution system through a product called Aquaquest. Agents would be able to book Orbitz fares and process them through Aqua's quality control and reporting products-and consequently through the agency's MIS reporting-without having to transfer to and from multiple Web sites. On Orbitz bookings, a passive segment for which airlines do not pay is stored in the GDS passenger name record to retain a complete itinerary. Clients would pay a "minimal" fee for such bookings, Nulty said.

"From an airline perspective, should a booking be made on a Web fare, the economics will look like Orbitz economics in terms of fees," Katz said. According to Katz, airlines pay Orbitz-backed by Worldspan-an average of 11 percent to 33 percent less than they pay GDSs for traditional agency bookings. Though such carriers as Northwest Airlines have expressed frustration with distributors bringing Web-only fares to non-Web channels, Katz cited the GDS savings and said, "I didn't ask them, but they're all aware and they support it." He said 44 airlines, eight hotels and eight car rental companies now have long-term agreements to provide all their publicly available fares through Orbitz.

"While maybe 12 percent to 15 percent of bookings now are online, the majority of travelers work with travel agencies and will for the foreseeable future," said Katz, noting that Orbitz interprets the federal computer reservations system regulations as meaning it cannot set up contractual relationships directly with agencies.

The Aqua deal, meanwhile, precludes for "less than a year" Orbitz from setting up a similar relationship with other agency automation providers. Ferguson said the system likely would require as many as 60 days of testing. Asked whether the deal bans Orbitz from testing with others in advance of the expiration of exclusivity, Nulty said, "We believe it does." Katz added, "We've got sort of a measured form of exclusivity. Thereafter, we'll have to see what happens."

Regarding the possibility that widening the availability of Orbitz fares could alleviate regulatory scrutiny on Orbitz, Katz said, "It's hard for me to know whether this will have an impact on the Department of Justice view. That's not the reason we did it. This is a deal that makes good consumer and business sense."

Nulty believes easing the access to Web fares will increase their usage by corporate travelers. "The reason usage is now so small is that it's such an incredible hassle," he said. "With other tools, you have to increase your headcount."