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American, Orbitz, and Expedia are reportedly in active talks to resolve their three-way dispute, which has dragged on into the new year. According to the Wall Street Journal, the three sides are trying to work out an agreement that would return American’s fares to the two online travel agency (OTA) sites.
But “talks”are just that, and it doesn’t sound like any of the involved parties are close to the sort of compromise it would take to return things to normal.
According to the WSJ, “American remains committed to a wholesale shake-up of its distribution strategy by requiring all external sellers to access its fares and schedules through a direct electronic link rather than through the global distribution systems.” That would seem an unacceptable resolution for the OTAs, which the WSJ says may be “concerned about losing some of the revenue from ticket fees shared with airlines.”
American maintains that bookings have been steady throughout the ordeal, though skeptics contend the airline is buoying sales with incentives for customers who book through aa.com. But the reality is that the situation isn’t sustainable for any of the parties involved, American especially. Certainly neither Expedia nor Orbitz enjoys the loss of the third-largest U.S. carrier, and American, which currently receives roughly two-thirds of its business from third-party booking sites, can’t afford to fight Expedia, Orbitz, and, by proxy, the entire online marketplace for long. Keep in mind that losing Expedia also means losing affiliated sites such as Hotwire and Tripadvisor’s flight search.
So, will we see a resolution soon? It’s hard to say. Speculation is circulating that some online travel marketers, perhaps including Priceline, have already accepted American’s Direct Connect model, and if true, that could embolden American to continue holding out. But if the loss of sales from Expedia and Orbitz proves too much, American will have to blink eventually. Right?