American Airlines is reportedly in “active discussions” with Expedia Inc. and Orbitz Worldwide Inc. after a contract dispute prompted American to block Expedia and Orbitz from selling its tickets.

Published: 05 Jan 2011

American Airlines is reportedly in “active discussions” with Expedia Inc. and Orbitz Worldwide Inc. after a contract dispute prompted American to block Expedia and Orbitz from selling its tickets.

In an interview with wsj.com, Cory Garner, American’s director of distribution strategies, said that 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, or GDS, such as Amadeus and Sabre that still dominate the airline ticket market, especially for corporate travel. He said American remains comfortable with booking levels despite dropping the two online sellers, and dismissed claims it was holding onto market share only because of extra incentives for passengers booking through its own website.

“Ultimately we will see all travel agency volume going through Direct Connect,” Garner said, referring to the American distribution system at the heart of its dispute with parts of the industry. That would include the GDS providers, whose contracts with American are due to expire later this year.

American Airlines says airlines need to compete on the basis of services offered in addition to price, and for its part, the airline has been working on technologies necessary to ensure that optional service pricing transparency is readily available to all who want to see it.

American Airlines has been clarifying that it has no plans to bypass GDSs, or put up a pay wall to access its content. Significantly, it is also being highlighted that most airlines investing in Direct Connect will still embrace a multi-channel strategy, in which GDSs and other intermediaries are granted access to a newer, improved airline product.

“We think the presence of direct connects between GDSs and airlines like Southwest and Easyjet proves that direct connect technology can be efficient for both airlines and travel agencies. We do not understand why American should be treated differently from any other carrier using similar systems. The technology is clearly not the problem,” Garner had told EyeforTravel’s Ritesh Gupta in an interview last month.

“Our position remains the same: the GDSs have a role to play in aggregating content on behalf of travel agencies. We are open to the possibility of GDSs adding our direct connect into the list of content sources that they aggregate. In the meantime, we will continue to pursue mutually beneficial relationships with travel agencies that involve non-GDS content aggregation technology,” Garner had said.