American Airlines Joins Online Reservation Group

FRAMINGHAM (05/01/2000) - American Airlines has become an equity partner in the yet-to-be-launched T2 airline reservations Web site, bringing the biggest unassimilated piece of the air travel puzzle into the T2 framework, which already includes United Airlines Inc., Delta Air Lines Inc., Northwest Airlines Inc. and Continental Airlines Inc.

American's decision to join was announced by Chicago-based T2 on Friday. The financial details of the airline's investment weren't disclosed.

With the industry's biggest players on board, T2 now hopes to open its Web site this summer. Theoretically, consumers will be able to surf the site, compare fares and have access to all publically available information -- without any preferences set for individual airlines.

"Customers increasingly want to use the Web, and they want to see all the options in one place, no matter which airline is involved," said Mike Gunn, executive vice president of marketing and planning at American Airlines in Fort Worth, Texas, in a statement.

"We need to provide those customers what they want, and we believe doing so will prove to be a good e-commerce investment for American," Gunn said. But he added that the airline will also continue to invest in other Internet-based channels, including its own Web site and other online travel agencies.

Before it was spun off into a separate company, Sabre Holdings Inc. - the parent of online travel agency leader Travelocity.com - was owned by American's parent company. With the T2 deal, American will now be helping to bring a young challenger to the market to compete with its former affiliate.

"American was one of the first to tie in its frequent-flier (program) with its Web site, and they've been an industry leader in innovation, so this is very good for T2," said Lorraine Sileo, an online travel analyst for PhoCusWright, a travel industry research firm in Sherman, Connecticut.

But it remains to be seen whether T2 can seize the opportunity presented by its deals with American and the other airlines that signed up earlier.

For example, T2 doesn't yet have a permanent management team and is currently relying on a consulting firm to oversee the development of its Web site.

Meanwhile, Continental is suing United over what it claims are anticompetitive business practices, throwing a damper on their relationship as partners in the new venture.

Alex Zoghlin, T2's newly hired chief technology officer, promised that the site will have "the most powerful fare and searching engine technology on the Web today," using the Worldspan global reservations system and a booking engine designed by Datalex Ltd. in Dublin.

But Sileo said technology alone won't replace a solid organization that can offer travelers a consistent listing of desirable flight schedules and low fares. "I'd be really surprised to see a hot (Web site launched by T2) in June, and I'd hate to see something sloppy," she said.

Executives at Travelocity and Expedia.com, the second-largest online travel agency, have expressed little worry that T2 will pose a threat to the survival of their businesses.

"T2 at this point is pretty much a large number of press releases," said Greg Stanger, chief financial officer at Expedia, at an online travel industry conference last week. "There really isn't anything to respond to yet."

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