Expedia and American Airlines Break Through Four Years of Dysfunction

Four years after Expedia removed American Airlines’ flights from the online travel agency’s sites, the duo reached an agreement for Expedia to begin providing its hotels to AA.com and for Expedia to begin offering its customers American’s Main Cabin Extra seats with priority boarding and extra legroom, and Preferred Seats with optimal locations in the cabin.

Consider the reversal that overturns the travel distribution dynamics of a previous era. In January 2011, Expedia removed American’s flights out of economic self-interest and solidarity with Orbitz, which was in a contract dispute with American over economics and the airline’s insistence that Orbitz and American establish a direct technology connection that bypassed Orbitz’s global distribution system providers.

After taking a financial hit, Expedia patched its ties with American in April 2011, restoring the airline’s flights, with some vague and hard-to-fathom language about enhancing their direct-technology links.

In announcing a renewal and expanded agreement yesterday to get American’s and US Airways’ flights on Expedia Inc. brands Expedia.com, Travelocity, and Hotwire, Expedia gets access to sell American’s preferred seats starting in late 2015.

Expedia Inc. spokesperson Sarah Gavin confirmed that the online travel agency will access the airline’s seat data through global distribution systems — and not through a direct-connect with American Airlines Group.

With its parent Fareportal, CheapOair and American Airlines Group announced an agreement more than a year ago to give the offline and online travel agencies access to preferred seats from American and US Airways.

It seems likely that Expedia gave some ground to American in the agreement given the fact that it is being rewarded with a new distribution channel for its hotel business, AA.com. Any Expedia concessions to American, though, don’t appear to have been related to the direct-connect issue.

On a formal basis, the hotel agreement is between the Expedia Affiliate Network and AA Vacations for AA.com.