Expedia removes American Airlines fares, new twist on Orbitz row
Expedia confirmed that as of yesterday (Thurs 22 December) it had “adjusted” the way the carrier’s fares are displayed across its sites – meaning the carrier now features at the far end of its list of available airlines and prices will not be shown, replaced with a link to a results page elsewhere on the site.
In essence, American is a “de-preferenced” airline on Expedia.
An official says the move was made for two reasons: in the light of AA’s decision to prevent Orbitz from selling the carrier’s inventory and “possible disruption” in Expedia’s ability to sell tickets from American Airlines when its contract expires.
Expedia’s existing agreement with American Airlines is due to run out Dec. 31.
In a strongly worded statement, in which Expedia also says the now infamous Direct-Connect system is “fundamentally bad for travelers”, the official adds:
“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.”
American Airlines has hit back with a strongly worded statement.
The carrier is essentially either no longer listed at all (its own doing) or seeing its fares way down the pecking order (by virtue of Expedia’s latest action) for visitors on two of the biggest online travel agencies in the US.
The question now is whether the carrier – and, indeed, the OTAs – can live without one another commercially and if consumers will cry foul.
PhoCusWright‘s senior research director, Douglas Quinby, says:
“Expedia is calling American’s hand, but I am not so sure the airline is bluffing. The current supply/demand dynamics, with strong corporate demand and still soft leisure demand, favor airlines. What is clear, we’ve gone from brinkmanship to all out warfare. The only question is, who’s next, and when?”
Meanwhile, according to Forrester‘s top travel analyst, Henry Hartveldt, Orbitz drives around $800 million in sales to American Airlines every year – this is not a figure to be sniffed at, yet American Airlines clearly believes its actions earlier this week and the wider Direct-Connect issue are worth doing.
Sabre, which was quick to lend its support to Travelport and Orbitz earlier this week, has issued its own statement:
“Sabre has seen the action taken by Expedia and we fully support Expedia taking steps to protect its customers’ interests and make clear its preference to continue using the proven system that enables it to efficiently and cost-effectively serve its customers.”
Sabre-owned Travelocity has not got involved as yet.
Kevin May is editor and a co-founder of Tnooz. He was previously editor of UK-based magazine Travolution for nearly four years and web editor of Media Week UK from 2003 to 2005.
He has also worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology and a postgraduate diploma in magazine journalism.