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Expedia announced it is no longer offering American Airlines fares, effective immediately, in the latest escalation of a business battle between the airline and the online travel marketplace. In a statement, Expedia said, “We remain open to doing business with American Airlines on terms that are satisfactory to Expedia and do not compromise our ability to provide consumers with the products and services they need.”
The dispute centers on American’s attempt to force online travel agencies (OTA) to use its own distribution system. Currently, third party global distribution systems (GDS) deliver fares and facilitate transactions between airlines and OTAs, typically at cost to the airline. American is proposing a “direct connect” model, in which the airline delivers fares directly to the OTA. Critics contend this model gives airlines the ability to manipulate fares on OTAs, thereby limiting consumer choice. American counters that it “is a strong believer in pricing transparency and the choice afforded customers by our inclusion in online shopping comparisons.”
In early December, American pulled its fares from Orbitz in an attempt to coerce the OTA into accepting its direct connect model. Expedia then began suppressing American fares, and now has pulled them entirely.
In its statement, Expedia says it believes the direct connect approach is “anti-consumer and anti-choice,” and claims it will “result in higher costs and reduced transparency for consumers.”
Customers with existing American reservations made on Expedia are not affected, though changes to those reservations must be made on aa.com (the same is true for existing Orbitz reservations).
For consumers, however, the real question is: What is the endgame? There are two games of chicken being played here—American vs. Orbitz and Expedia vs. American—with travelers caught in the middle of both. Eliminating a large airline from two major OTAs, including the largest, is bad for consumers, period. And at this point, it’s hard to see either side blinking.
(Editor’s Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Expedia.com.)
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