Orbitz late yesterday said it expects to come to a "mutually agreeable resolution" with Worldspan despite threatening to terminate its relationship with the Atlanta-based global distribution system company that provides its car and most of its air content. Worldspan had announced that Orbitz informed it of plans to terminate their long-term contract effective Oct. 31. "Orbitz claims that it has a right to terminate the agreement because of a material service level failure by Worldspan," the GDS said. "Worldspan has provided and continues to provide a superior level of service, and Orbitz does not have the right to terminate the agreement."
"Worldspan is an important vendor and technological partner to Orbitz," according to an Orbitz statement. "We are discussing service level issues with Worldspan."
Orbitz said in a recent filing with the Securities and Exchange Commission that "In the past, third parties, including Worldspan and Pegasus, have suffered system outages that have adversely affected our ability to offer our travel services or to process booking transactions."
Another potential issue is Orbitz's development of direct links with airlines, on which Worldspan has secured limits in its Orbitz 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).
According to an SEC 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
(BTN, July 7), yesterday said it "is currently considering its remedies against Orbitz, including with respect to wrongful termination of the agreement."
Worldspan's three largest online agency subscribers--Expedia, Orbitz and Priceline--generated about 37 percent of its total 2002 travel bookings, according to the SEC document.