American Airlines row escalates as Expedia stops flight sales

American Airlines row escalates as Expedia stops flight sales

Expedia has become the second online travel agent (OTA) to stop selling American Airline flights as the carrier continues to push its direct booking system. Despite reports that the companies are in ongoing discussions over the row, Expedia pulled down AA’s fares on 1 January. “We have been unable to reach an agreement with American Airlines due to its new commercial strategy that we believe is anti-consumer and anti-choice,” the agency said in a statement. “As a result, the sale of American Airlines flights on our website has been suspended. We remain open to doing business with American Airlines on terms that are satisfactory to Expedia.”  The news comes after Orbitz Worldwide was forced to stop selling AA flights when a court ruled that the airline could cancel its all-content agreement with the company. Meanwhile, Cory Garner, director of distribution strategies at AA has told the Wall Street Journal that travel agents would still book through GDS using its own system, named Direct Connect. He insisted the airline’s sales were still ‘comfortable’ despite that two thirds of AA’s sales are through third parties. However, the Business Travel Coalition said the 20 percent discounts offered on AA flights through Orbitz suggested otherwise. “In such a price-sensitive environment for consumers, discounts of this magnitude no doubt increased AA’s bookings likely masking the true negative impact of its actions and business predicament,” BTC said in a statement. “Indeed, these discounts represent the price AA now has to pay to maintain market share.” It believes that the non-OTA coverage will divert consumers to competitors through both agencies and direct. “This could represent a much bigger number and bottom-line impact than AA was prepared for or is willing to acknowledge. Or, perhaps the buy-the-business discount initiatives represent tacit acknowledgment.”

Gary Marshall
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Gary Marshall
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