In what can only be described as an incredibly strange show of support for a staunch competitor, online travel agency (OTA) Expedia has decided to “de-preference” listings from American Airlines following the move earlier this week by AA to pull their fares from Orbitz. It is still possible to purchase AA fares on Expedia but the offerings from the carrier are not included in the regular results matrix. American Airlines is the last carrier listed in any search and rather than displaying the price a customer must click through to another page to see the AA options:
Even when clicking on the “See flights” link the fares do not show up:
When selecting random AA flights in this particular case they were the same price as the cheapest ones listed above but the process of finding those fares on Expedia is somewhat time-consuming and most definitely not trivial.
This move is certainly an escalation in the battle over fare distribution and one that was not particularly expected by most folks. Still, Expedia’s contract with American Airlines is coming up for renewal very soon, similar to Orbitz’s and given how that negotiation transpired this move seems to be giving Expedia a bit of leverage, at least for now.
An Expedia official offered the following, somewhat scathing statement:
American Airlines has shown it only intends to do business with travel agencies through a new model that is anti-consumer and anti-choice.
We believe American Airlines’ proposed direct connect model will result in higher costs and reduced transparency for consumers, making it difficult to compare AA ticket prices and options with offerings by other airlines.
American Airlines’ direct connect model is of questionable, if any, benefit to travelers, costly to build and maintain and would compromise travel agents’ ability to provide travelers with the best selection.
One analyst has estimated that Orbitz provided $800MM in revenue to American last year. Although the exact numbers are not published that sort of revenue should translate into something north of $10MM in revenue for the GDS systems that are owned by Travelport which also owns Orbitz. It is not clear what the actual revenue effects will be on either side of this fight but it is quite clear that there is a rather significant amount of real money at stake.
I guess the old proverb “The enemy of my enemy is my friend” does not always hold true.
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Good job Expedia!
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