NEW YORK (TheStreet) - Orbitz Worldwide (OWW) shares continued to decline on Wednesday following American Airlines (AAL) decision on Tuesday to withdraw it fares from being listed on Orbitz's Web portal. American Airlines also intends to withdraw U.S. Airway fares on September 1, it said. Corporate clients who use Orbitz for business travel will not be affected.
"We have worked tirelessly with Orbitz to reach a deal with the economics that allow us to keep costs low and compete with low-cost carriers," said Scott Kirby, President of American Airlines, in a press release. "While our fares are no longer on Orbitz, there are a multitude of other options available for our customers, including brick and mortar agencies, online travel agencies, and our own websites."
Shares of Orbitz were lower in Wednesday trading, off 0.60% to $7.99.
Orbitz said in a statement that: "Our sites offer hundreds of airlines which are eager to capture the revenue American is choosing to forego and we will continue to show our customers a broad range of flight options to thousands of destinations in the U.S. and worldwide. Orbitz for Business is not impacted."Read More: American Airlines -- Step Up and Face Regional Pilot Pay Issues, Says Lee Moak Here's what Wall Street analysts are saying about Orbitz on Wednesday: Naved Khan, Cantor Fitzgerald (Hold; $10 PT) While American Airlines' decision to withdraw fares from Orbitz is no doubt a negative for the company and the stock, we estimate that the impact on both the top and bottom lines is likely to be limited. OWW's reliance on the Air segment for revenue has diminished since the last dispute with AAL (2010-2011), partially offsetting the increased exposure to AAL resulting from the acquisition of US Airways. We opt to remain on sidelines given a) lack of visibility into the timing/terms of a resolution with AAL and b) potential downside risk to FY:14 outlook from this issue.
Read More: 5 Most Beloved U.S. Airlines of All Time
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV