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Orbitz charges fees for two airlines

The online travel site tacks on a $5 service fee on all round-trip tickets for flights on America West Airlines and Air Canada.

Online travel site Orbitz is tacking a $5 service fee onto all round-trip tickets for flights on America West Airlines and Air Canada, the company said Wednesday.

The fees are in addition to the $5 service fee that Orbitz began charging for all airfare last December. The additional fees follow the airlines' move to stop paying travel agencies commissions, said Orbitz spokeswoman Carol Jouzaitis.

America West and Air Canada are negotiating with Orbitz about how to compensate the Chicago-based travel site for selling their fares, Jouzaitis said.

A growing number of airlines have halted paying commissions to both online and traditional travel agencies. With the airlines trying to pull themselves out of an industrywide slump, cutting costs has become crucial.

To make up for the lost commissions, many traditional and Web travel agents have begun to charge service fees. Orbitz competitor Travelocity slapped a $10 service fee onto all United Airline fares last month.

Henry Harteveldt, an analyst with Forrester Research, is critical of Orbitz's move. He argues that Orbitz, created by five of the top U.S. airlines, is trying to prod America West and Air Canada into joining Orbitz's "charter group" of airlines.

Since launching last summer, Orbitz has struck deals with 43 airlines, including its five backers, to receive access to their lowest Web fares.

"Orbitz is holding (America West and Air Canada) hostage," Harteveldt said. "And the ransom is a $5 service fee."

Harteveldt added that Orbitz will likely come to some agreement with the airlines and "should be fairly compensated for selling fares."

But "not getting commissions doesn't hurt Orbitz financially that much because it already charges a $5 fee for all flights," he said. "Charging $5 for one carrier and then $10 for another is confusing to the customer. Orbitz is passing its business problems on to the consumer."

Jouzaitis said in addition to the $5 service it charges customers, another important source of revenue for the travel agency is the commissions or fees that it charges airlines. Since America West and Air Canada stopped paying commissions, Orbitz had no choice but to charge customers.

"It's not fair to charge some airlines for our services and not others," she said.