A coalition of consumer groups is calling on the federal government to block the launch of a planned industry-wide Internet airline reservation system, saying the venture would cost consumers billions of dollars in higher airfares.
In a letter to Transportation Secretary Norman Mineta, the American Antitrust Institute and some 15 other airline and consumer groups asked the government to step in and stop Orbitz, a collaborative one-stop-shop for online ticketing owned jointly by American Airlines, Delta Air Lines, Continental Airlines, Northwest Airlines and United Airlines.
According to MIT Economics Professor Jerry Hausman, the venture would cost consumers $3.2 billion in higher ticket prices. Orbitz opponents say the network will help obscure the need for travel “middlemen,” and could squeeze other competitors out of the market.
In a filing with the Transportation Department earlier this year, attorneys general from New York, Iowa and California warned the proposal raised sweeping antitrust concerns, a claim supported in turn by some 17 state attorneys general. The Justice Department is investigating the deal, which has also been the subject of several congressional hearings.