Economics Professor Jerry Hausman warned in the study that Orbitz's launch in its current form would likely hurt competition and innovation in the airline industry and become a "market power ringmaster," allowing airline owners to coordinate anti-competitively.
Orbitz officials immediately derided the study, saying that its conclusions are dubious because the study was sponsored and paid for by competitors of the new venture. The study's sponsors were the Interactive Travel Services Association, whose members include Travelocity.com and Expedia the American Society of Travel Agents; and Southwest Airlines.
"This is an example of entrenched competition trying to stop a new entrant into the market," said Orbitz spokeswoman Stacey Spencer in Chicago.
Orbitz, formed in 1999, is backed by United Air Lines, American Airlines, Delta Air Lines, Northwest Airlines and Continental Airlines. Orbitz plans to launch publicly in June with online airline and other travel services. In February it began selling airline tickets in a beta version of the site (www.orbitz.com) and has about 10,000 registered users, Spencer said.
Both the US Department of Transportation and the Justice Department are investigating the venture, and Hausman urged the agencies to take steps before the launch.
