Runway clear for Orbitz
Jeffrey Katz, CEO, Orbitz
Southwest filed the suit in U.S. District Court in California on Thursday. The low-cost airline asked the court for a preliminary injunction that would prevent Orbitz from using its trademark or falsely describing its fares or services.
"Most observers believe that the airline industry needs to be more competitive," Jim Parker, Southwest's vice president and general counsel, said in a statement. "Orbitz is a step in the wrong direction."
In a letter sent Friday to Southwest, Gary Doernhoefer, general counsel, said the company had fixed some of the outstanding issues.
"We were hopeful that Orbitz response would begin a productive dialogue for our companies' mutual benefit and the benefit of consumers who want to be able to shop conveniently online for the best available fares from all airlines," Doernhoefer said in the letter. "We doubt very much that the threatened litigation is a better way to resolve the remaining differences."
Representatives for Southwest and Orbitz did not return calls seeking comment.
Backed by United Airlines, Delta Air Lines, Continental Airlines, Northwest Airlines and American Airlines, Orbitz has been under scrutiny by federal and state regulators over possible antitrust violations. The U.S. Department of Transportation said last month that while it would monitor Orbitz's operations, it had no reason to prevent the site from launching. Meanwhile, an investigation by the Department of Justice is ongoing.
Orbitz, which quietly launched its site recently, plans to officially debut on the Web next month.
In its suit, Dallas-based Southwest charged that Orbitz published false information about Southwest's routes and fares. For instance, while Orbitz said that a Southwest flight from New York's Long Island to Baltimore would cost $97 round trip, Southwest said it actually offered a lower fare of $60.
Meanwhile, Southwest said Chicago-based Orbitz falsely told customers that Southwest offers connecting flights with overnight layovers.
Additionally, Southwest charged that Orbitz is using its trade and service marks without Southwest's permission.
Orbitz has already "changed" its use of Southwest's trademark, Doerhoefer said in his letter. The company has also updated its software to provide more accurate information about Southwest's schedule and booking restrictions, he said.
But Doernhoefer said Orbitz's fare information comes from the same database from which travel agents get their fares. Such data is public information, Doernhoefer said, adding that Orbitz would be "happy" to publish Southwest's lower fares that are available only though the company's Web site.