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Orbitz, Air Canada reach agreement

The airline-backed travel site has removed a $5 service fee on all round-trip tickets for flights on Air Canada, the company says.

Airline-backed travel site Orbitz removed a $5 service fee on all round-trip tickets for flights on Air Canada, the company said Wednesday.

Orbitz told CNET News.com that it had imposed a service fee on all Air Canada and America West Airlines fares. Orbitz said the move was in response to both airlines cutting commissions to travel agencies. Earlier Thursday, Travelocity.com ceased charging an extra $10 on United airfares after the companies said they were in discussions to strike a "marketing agreement."

Orbitz spokeswoman Carol Jouzaitis said Thursday that the Web travel agency and Air Canada had reached a resolution under which Air Canada will pay Orbitz for its services. She said that Orbitz was optimistic that a similar deal could soon be reached with America West.

As the airlines have wiped out commissions, the online travel agencies have moved quickly to pen new compensation agreements with them. Little is known about how the airlines are now paying Web travel agencies, but some travel sites that aren't getting what they want from the airlines have begun tacking on fees.

Fort Worth, Texas-based Travelocity imposed a $10 fee on United Airlines flights late last month and did the same to Northwest Airlines and KLM flights last year. Travelocity soon removed the fees after it reached an agreement with the airlines.