United had previously stated that it's a new era because of its mobile app and its ability to attract direct traffic to its websites. But the two parties found a way to come to terms.
After a court fight and months of posturing over parting ways, Expedia Group and United Airlines have announced a new multiyear contract, avoiding some disruption as the existing pact was set to expire September 30.
“This new agreement ushers in an expanded relationship, meeting the strategic objectives of both companies and benefiting travelers around the world,” the companies said in a joint statement without providing much detail. “The agreement continues Expedia Group’s leisure distribution with United, expands United’s relationship with Expedia Partner Solutions, builds on United’s relationship with Egencia, Expedia Group’s corporate travel business, and the companies will work to expand cooperation into other areas in the near future.”
There were plenty of hints recently that a meeting of the minds was in the works. At United’s investor day last week, in response to a question, United Airlines President Scott Kirby noted that there were “18 days to go” until the expiration deadline, adding “we are talking to them [Expedia] now.”
“So we’ll see what happens, but I’ve been asked by investors earlier today, a few of them in the one-on-one meetings, and what I’ve said to people is, it’s not on my top 10 list of things to worry about.”
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While the parties have not talked about the economics of the new contract, it’s fair to say that the new Expedia-United contract follows the recent pattern of the recent Marriott-Expedia deal in which the two sides found new ways to work together beyond the traditional way of selling tickets or rooms. Expedia, for example, in recent years has powered Marriott Vacations and Marriott-Expedia officials have said they have agreed to a new technology relationship.
Thus, United and Expedia stated they will expand the airline’s relationship with Expedia Partner Solutions and Expedia’s corporate travel unit Egencia and will endeavor to find additional ways to work together.
A federal judge in Manhattan sided with United in April in tossing out an Expedia motion to grant a preliminary injunction against the airline, which had sought to withdraw flights on Expedia for travel after the tentative September 30 contract negotiation.
In the intervening months, while United officials said market conditions in 2019 mean that United doesn’t necessarily need online travel agency distribution, Expedia CEO Mark Okerstrom said in May it would be “completely bewildering” if the two sides couldn’t come to terms.
While an Expedia-United divorce may have materially impacted the parties, the fact that the two sides reached a new multiyear contract will not likely make a major financial difference to either compared with the previous pact.
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Tags: contracts, expedia, united airlines
Photo credit: United and Expedia reached a new contract. United Airlines