The American Airlines Group Inc (AAL) & Orbitz Worldwide, Inc. (OWW) War: Who is the Loser?

The talks over pricing between American Airlines Group Inc (NASDAQ:AAL) and Orbitz Worldwide, Inc. (NYSE:OWW) came to a halt, which resulted in American Airlines Group Inc (NASDAQ:AAL) withdrawing its flights from the websites operated by Orbitz Worldwide, Inc. (NYSE:OWW). The flight reservation monopoly game is nothing new, a lot of travel websites have tried to strong arm major airlines to shell out higher fees for booking done through their portals, but now it seems the tide is reversing. Daniel Kurnos, Senior Analyst at Benchmark Company, and Mike Miller, President of Miller Air Group, discussed on CNBC earlier today about the games that are being played between travel websites and airline companies.

american airlines

“They can’t drive everything back to their own website, but what they are really faced with is akin to McDonald’s making a $1 hamburger and somebody reselling it for $10. The producer of the ticket American Airlines Group Inc (NASDAQ:AAL) knows their cost, they sell them on their own website […],” Miller said.

Miller mentioned that American Airlines Group Inc (NASDAQ:AAL) is a much stronger company now than it was two years ago hence it can play the aggressor here when firms like Orbitz Worldwide, Inc. (NYSE:OWW) try to overcharge.

According to Kurnos, American Airlines Group Inc (NASDAQ:AAL) along with U.S. Air makes up for 7% of Orbitz Worldwide, Inc. (NYSE:OWW) revenues, so even though Orbitz Worldwide, Inc. (NYSE:OWW) might lose in revenues, it’s actually American Airlines Group Inc (NASDAQ:AAL) that will also suffer because it will lose a lucrative distribution platform. Kurnos believes that firms like Orbitz Worldwide, Inc. (NYSE:OWW) play a pivotal role when customers are planning and booking their trips.

“Basically it costs American Airlines Group Inc (NASDAQ:AAL) $1 or $2 basically that’s the industry benchmark for an airline to sell its own ticket, that’s the IT cost, the delivery cost, legal costs and the resellers the middlemen, the Orbitz Worldwide, Inc. (NYSE:OWW), the Expedia are charging $6, $8, $10 a ticket. Some even more for an international ticket [...],” Miller added.

Disclosure: None

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!