Orbitz plans to terminate its long-term contract with Worldspan effective Oct. 31, Worldspan said today. "Orbitz claims that it has a right to terminate the agreement because of a material service level failure by Worldspan," the Atlanta-based global distribution system provider said. "Worldspan has provided and continues to provide a superior level of service, and Orbitz does not have the right to terminate the agreement."
According to a Securities and Exchange Commission document Worldspan filed last month, its online travel agency subscribers are allowed to cancel their contracts "in the event of, among other things, payment or service level defaults by us and, in some circumstances, changes of control." Worldspan, whose sale by American, Delta and Northwest airlines closed in July, today said it "is currently considering its remedies against Orbitz, including with respect to wrongful termination of the agreement."
Orbitz recently said its agreement with Worldspan hinders the growth of bookings it makes directly in certain airline reservations systems as part of its Supplier Link service
(BTNonline, Aug. 28). Worldspan's three largest online agency subscribers--Expedia, Orbitz and Priceline--generated about 37 percent of Worldspan's total 2002 travel bookings, according to the SEC document.