Earlier in January, we heard that American Airlines’ fares and links were removed completely from travel bookings site Expedia, after the two companies failed to come to a distribution agreement. Today, American Airlines and Expedia have made peace, announcing a new ” memorandum of understanding” that will allow the companies to resume doing business together effective immediately.
Financial terms of the agreement have not been disclosed, but clearly, the airline and travel site were able to come to a mutual agreement that suited their interests financially. American had a similar issue with travel search site Orbitz, and also removed its listings in late December 2010.
American itself has been trying to build up its own bookings site, and industry insiders thought that the airline was planning to adopt Southwest’s model of offering fares and booking solely through its site. As Airfare Watchdog reported earlier this year, the benefit of having consumers buy their flights on AA.com is that the airline makes money from the extra upgrades, including seat upgrades, insurance products, vacation packages, and hotel and car reservations.
While American didn’t expect a significant drop in sales from removing fares from Expedia, the fact that the two companies eventually reached an agreement makes me wonder if there was a financial impact for the airline after all. American also recently signed a distribution deal with Priceline.