Friday, January 12, 2007

EXPE vs AA - who will be the strongest warrior

Expedia and American Airlines are having a bit of a fight according to Reuters. The news wire article says that AA international an non-coach domestic fares will no longer be available through I presume the battle is over attempts by American to follow the trend limit /eliminate commission payments to Expedia but do not have positive information to confirm. If that it the reason then Expedia must be adopting different tactics in the US to the other locations. In the UK, Expedia continues to sell BA flights and their Australian operation is selling Qantas and Virgin Blue domestic. Traditionally in battles between suppliers and large intermediaries you have a period where on switches off the other while the battle continues in the background until one party "blinks" or a compromise is reached. However in the airline commission battle, so far none of the first mover airlines (BA, Singapore Airlines and Qantas) have blinked. Could be that the US is different as there are more airlines for Expedia to shift share to but there will be some routes where this will hurt. Looking forward to watching round 2 of this fight.

UPDATE - are quoting an AA source as saying that AA and Expedia could not
“come to economic terms”
should be clear confirmation that AA wanted to lower commission and Expedia refused to accept. For their part Expedia says that the reason was
“...the result of Expedia’s choice to cease processing AA bookings using the Worldspan GDS at this time...[and]...independent of any negotiation issues with AA”

1 comment:

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