A Major Website

Whe

n website whiz Alex Zoghlin proudly told his mother last spring that he'd got a new job running an online travel site, she flipped. His new employers--the big airlines--are trying to put her out of business. She's a travel agent.

This week five big carriers will officially launch the website, which until now has been known as T2. The site is an unprecedented cooperative effort by United, American, Delta, Northwest and Continental to grab a bigger share of the rapidly increasing Internet travel business and outmuscle some established travel websites. The new megasite can check billions of travel options and provide not only airline information and ticketing but also hotel and car rentals, weather data and customer opinions.

The new venture is part of an effort by the airline industry to cut out the middlemen. The Travel Industry Association estimates that 85 million travelers booked flights online in 1999, using sites such as Travelocity, Expedia and Priceline to find the best deals. The airlines covet those "eyeballs" for their own Web pages as well as the money they'll save by not having to pay fees to the independent online firms.

So can travelers believe Zoghlin when he says, "Our sole goal is what is best for the consumer"? Consumer groups, travel agents, politicians and a wide assortment of airline experts are not so sure. Says Mark Silbergeld, of Consumer's Union: "In an industry made up of a series of cartels that have never been in the business of offering the best deal for the consumer, this site is the perfect opportunity for collusion." In fact, Donald Carty, the ceo of American Airlines, surprised Senators when he openly told a committee hearing last May that the airlines would actually restrict some of their best deals exclusively for T2.

The Department of Justice said three weeks ago that it is investigating the new website even before it has been booted up. Republican Senator John McCain, head of the Senate Commerce Committee and an ardent proponent of more competition in the air, plans a Capitol Hill hearing focused on T2 next month.

Zoghlin thinks all this regulatory attention is unwarranted: "If I thought I was just a pawn for the airlines...I wouldn't be here." Alex, have you called your mother lately?