American and Expedia: Is the deal for real?

The kiss-and-make up announcement by American Airlines and Expedia raises more questions than they answer, according to Travel Technology Update.

The companies said that, effective immediately, access to American’s fares and schedule information is restored to Expedia and Hotwire sites worldwide.

The information will “initially” be provided to Expedia via the GDS technology that was used prior to their breakup.

The statement said Expedia plans to access American’s fares, schedules and customised travel products and services via American’s direct connect link by using “aggregation technology provided by a GDS”.

American’s fares and schedules were removed from Expedia at the end of 2010 when their contract expired.

The sticking point was American’s direct-connect strategy: It wants to connect directly via XML with travel management companies and online travel agencies in order to distribute its “customised travel products”.

American’s goal is to create ancillary services dynamically based on a customer’s history, status and preferences, using proprietary customer data.

But with few exceptions TMCs and OTAs have baulked at investing in new technology and changing their workflows.

Toward the end of 2010, American pulled its ticketing authority from Orbitz over the direct-connect issue.

In a show of solidarity – or perhaps as a warning shot over American’s bow – Expedia made American’s fares more difficult to find on its site, and the two companies failed to reach a new agreement.

The American-Expedia statement did not specify which GDS would provide the aggregation technology.

All three GDS companies have aggregation technology, and all three have or are rolling out multi-source agency platforms.

Sabre is Expedia’s primary GDS in the US. The online agency also works with Amadeus in Europe.

Travel Technology Update says the announcement also could signify that neither Expedia nor American benefited from their standoff, and both realised there was little point in prolonging the dispute.

American and Sabre, which also had been sparring and suing over the direct-connect issue, called a truce in January, putting aside their differences and their legal manoeuvres until June 1.

American’s contracts for participation in Sabre and the other GDSs expire this summer, and some observers suggest that the direct-connect strategy is a ploy to obtain better terms.