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Orbitz Worldwide Reaches Settlement with Skiplagged.com - Analyst Blog

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Orbitz Worldwide, Inc. ( OWW ) reached a settlement over its claims that travel website Skiplagged.com enabled consumers to purchase improper "hidden city" plane tickets and undercut its sales.

Rewind

Curiosity and a lot of chutzpa is all that it took for Aktarer Zaman to build a website called Skiplagged, which filters out low-priced airfares, predominantly a type of cheap airfare called Hidden City.

In an interview with Skift, Aktarer revealed how he got the idea of Skiplagged. He said, "In 2013, I was searching for flights from New York to Seattle and the cheapest option was $170 and had a layover in San Francisco. And then I searched New York to San Francisco and it was $300 and this was the same exact flight, New York to Seattle, so it sparked my curiosity and I discovered other things like two arbitrary one-ways can actually be cheaper than a round trip."

In November last year, Orbitz and United Airlines together filed a lawsuit against Skiplagged. According to CNN Money's Patrick Gillespie, in the lawsuit, United and Orbitz called Skiplagged "unfair competition" and said it promotes "strictly prohibited" travel. They asked for $75,000 in damages.

However, this did not deter Aktarer and he decided to put up a fight.

Zaman went ahead and launched a crowdfunding platform on GoFundMe. He turned to the users of his site to settle costs of its defense, soliciting contributions with a banner across the top of the website home page. It claims donations of approximately $75,000 from about 3,500 people.

Why the Lawsuit?

According to the lawsuit, last year, United asked Zaman to stop showing United's hidden-city opportunities, and Orbitz demanded that Skiplagged stop sending people to its site.

United and Orbitz argue that Zaman, simply by operating Skiplagged, illegally "interfered" with United's contract with customers (United's contract prohibits hidden-city ticketing) and Orbitz's contracts with several airlines.

The Settlement

A couple of months later, Orbitz finally settled with Skiplagged. However, United hasn't settled thus far.

Skiplagged on its part has agreed to remove Orbitz logos and references from its website and to stop redirecting its users to the online travel service site.

Orbitz currently holds a Zacks Rank #4 (Sell). However, better-ranked stocks in the industry include PetMed Express, Inc. ( PETS ), EVINE Live Inc. ( EVLV ) and Autobytel Inc. ( ABTL ).While PetMed sports a Zacks Rank #1 (Strong Buy), EVINE Live and Autobytel carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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