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(c) Elliott Publishing.

Flying Cheap
Kirby's Korner · September 8, 2000

Cheap Charlie recently wrote a couple of columns here on Ticked.com singing the praises of the yet-to-be-launched, airline-owned online travel agency, Orbitz.

He first explained why he likes Orbitz, although he cautioned that it could lead to overwhelming airline control of Internet travel sales.

He then applauded ITA Software, the technology behind Orbitz that provides travelers unprecedented choice in routes and prices. He charged that the coming battle for airline ticket sales will be between the two-decades old technology of existing airline distribution systems and new technology such as ITA uses. And he suggested Congress is sure to act to stop airline abuses of the new technology.

I stand second to no one in my admiration for what Orbitz is trying to do. I've been writing about the Web site for nine months now, since the venture was first announced. (Click here for my latest column, which contains links to earlier columns.) And I still have the whip marks I received from brick-and-mortar travel agents as a result of the early favorable columns to prove it!

I think Charlie's wrong about one assumption he makes -- that Congress will mandate that airlines distribute all flight information equally to online travel sites. There simply isn't time for Congress to act before Orbitz goes live. Congress is back in session for at most a month after Labor Day and then takes off to campaign, effectively ending the legislative calendar. And if Congress doesn't act before Orbitz goes live, there's less chance it will act later.

Orbitz had been making noises about launching in mid-September. Now its new boss, former American Airlines and Swissair executive Jeff Katz, has indicated the launch may be pushed back to the end of the year or the first of next year. Even then, Congress will still be reeling and then celebrating after a November election, killing any opportunity to interfere with Orbitz's operations.

I also disagree with Charlie's tacit assumption that the airline owners will directly control Orbitz. As owners, they'll certainly set general policy, but they're not going to interfere in day-to-day decisionmaking. Even if they had planned to, the attention they've drawn to themselves is enough to make them change their minds.

Here's the key to telling whether I'm wrong: watch how long Alex Zoghlin, Orbitz's chief technology officer, stays with the company. So long as he stays, I'd bet Orbitz management -- and not the airlines -- are in control of the venture.

All the Orbitz publicity certainly has been a boon for ITA, however. The small company, virtually unheard of a year ago, should have companies lining the streets to use its groundbreaking software. It recently signed on to support a corporate business travel tool, Highwire; expect to see it elsewhere around the Web in short order.

For those of you who don't want to wait for Orbitz to open with discounted airfares, there's still good news. Hotwire, whose one-upmanship of journalists I cheered recently, is set to go public in September.

Recent tests of the system have resulted in airline tickets being sold for up to 40 percent off ordinary rates, the company says.

After launch, hotel reservations in limited geographical areas will be added in October, and car reservations will be in place by the end of the year. Hotwire is similar to Orbitz in many ways. Six airlines have invested in the company (four of these are also Orbitz owners), although it is primarily controlled by an investment firm.

It is different in one key respect, however. It is using technology to handle reservations that was once owned by an airline and that, at its heart, is more than 20 years old.

When Orbitz and Hotwire are both running, we'll have a good test of how correct Cheap Charlie is in believing ITA Software is the future of travel technology.

David Kirby is the content manager at startup company iJET.com and was the founding editor of Interactive Travel Report. His column appears on Friday. You can reach him at david@ticked.com.