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View Full Version : American Airlines in dispute with Orbitz and Expedia


PAXboy
29th Dec 2010, 02:24
Here is one item: Expedia Now Suppressing American Airlines Fares - SmarterTravel.com (http://www.smartertravel.com/blogs/today-in-travel/expedia-now-suppressing-american-airlines-fares.html?id=6498243)

Another: Expedia hides American airfares after row (http://www.business-standard.com/india/news/expedia-hides-american-airfares-after-row/419599/)
Expedia Inc’s travel website is hiding airfares for American Airlines after the third-largest US carrier pulled data from Orbitz Worldwide Inc as part of a legal dispute. Prices for American flights no longer appear at the top of the site when passengers search for tickets, while those for competitors such as United Continental Holdings Inc are still shown side by side so travellers can compare.Then this: Expedia Shares Are Ready for Takeoff - Barrons.com (http://online.barrons.com/article/SB50001424052970203822504576047773577173238.html?mod=BOL_hpp _highlight)
One might think that the a rise in the fortunes of both the travel and e-commerce industries in recent months would bode well for shares of online travel agency Expedia.

The stock is down almost 4% over the past year, depressed by fears of a push toward greater airline control over ticket sales and the spectre of a likely entrance by Google (ticker: GOOG) into the online travel arena, among other concerns.

Analysts argues that fears swirling around the stock are overblown and shouldn't seriously affect Expedia's (EXPE) bottom line. Meanwhile, Expedia trades at only 13 times forward earnings, a multiple that seriously undervalues its market leadership, robust earnings growth potential (16% growth expected in fiscal 2011) and solid management.First, the Internet cut out the high street travel agent and buckets shops, now it might be used to cut out some of the online agents and bucket shops. Nothing stands still.

Hartington
29th Dec 2010, 07:53
How do you feel about the idea that when you go to buy an airline ticket the offer will be based on knowing who you are and will therefore vary from the offer made to another person for an identical purchase? That's where the airlines are trying to get to I reckon. Either that or they want to introduce the same kind of impossible to compare pricing used by mobile phone companies.

Capetonian
29th Dec 2010, 08:37
Once upon a time, I understood all this and although it made not a great deal of sense from the perspective of the consumer, it did from the provider's perspective. It was all about maximising the yield for each seat.

It is now more about power and politics than yields and it seems the distribution channels are cutting their own throats to spite providers. Or is this an oversimplistic view?

PAXboy
29th Dec 2010, 08:48
When modern mobile cellular radio networks were introduced into the UK in January 1985, the network providers - Vodafone and Cellnet - were not allowed direct access to the customer, by law.

This was a protection so that the networks would do what they do and both wholesalers and retailers could do what they do best.

Within 15 years, the networks had direct control of end-to-end. Some wholesalers and retailers remain but they have greatly limited places to move within what they can do for the end user.

So I think we are seeing a traditional concentration of power as one sees in ANY market. Over time, the manufacturer/wholesaler/retailer chain expands and contracts.