American Airlines Dropped By Another Travel Site

Jan. 5, 2011— -- American Airlines says it now hopes to reach deals to resume ticket sales with Internet travel agent sites Expedia and Orbitz after dropping its fares from Orbitz last month and then seeing Expedia retaliate by partially hiding American fares from its search function.

American's announcement comes just as Sabre, a behind-the-scenes provider of airfare data to travel agencies, announced it will display American Airlines information less prominently.

"The actions, which include biasing its shopping displays, are anti-consumer, anti-competitive and harmful to its subscribing agents," the airline said in a statement.

These are just the latest development in what has become an escalating stand-off between American and ticket distributors over the fees associated with selling airfare.

"Today's news from Sabre represents a serious escalation of the growing conflict around airline-mandated "direct connects", said Mike McCormick, executive director of the National Business Travel Association. "Business travel buyers will ultimately foot the bill for marketplace fragmentation caused by airline initiatives that push the travel distribution marketplace in the wrong direction -- away from transparency and competitiveness and toward confusion and higher costs."

Airlines pay fees to third-party sites, such as Travelocity, Expedia or Orbitz, that sell seats on their flights. Those fees can be as high as $4 per flight segment, according to Robert Mann, an airline consultant and president of R.W. Mann & Company.

American, like most of the major airlines, sells about two thirds of its tickets through third-party sites but has been trying to rein in those costs and also direct more customers to its own website, a model favored by Southwest Airlines. What makes Sabre's move particularity interesting is that the system, which services most of the airlines, was originally designed to help American with its bookings and was once part of the airline.

Sabre, along with Amadeus, Galileo and Worldspan, are known as a global distribution systems, or GDS, and they provide most of the back-end airfare data to traditional travel agents, corporate travel departments and online travel sites Orbitz and Expedia.

If American can't reach a resolution with Orbitz and Expedia, it is going to have to train customers to go through other channels to find its flights.

Any American Airlines tickets previously sold on these sites are still valid.

So far, no other major airline has followed American's lead in fighting with the big three booking sites. However, last month, Delta did pull its tickets off three smaller travel sites: CheapOair, BookIt.com and One Travel.

The travel sites aren't too happy.

"American Airlines is attempting to introduce a new direct connect model that will result in higher costs and reduced transparency for consumers, making it difficult to compare American Airlines' ticket prices and options with offerings by other airlines," Expedia said in a statement released last week. "American Airlines' direct connect model is of questionable, if any, benefit to travelers, would be costly to build and maintain and would compromise travel agents' ability to provide travelers with the best selection."

For its part, American says that ticket sales have not been hurt after the break with the travel companies, which has now lasted about three weeks.

Airfare experts say the ongoing battle will mean more work for passengers looking for the cheapest flights.

"The move does make things a bit more difficult for consumers in terms of comparison shopping, since they will have to remember to search American separately if using Orbitz," said Anne Banas, executive editor of the travel website SmarterTravel. "However, my advice would be to use a meta-search engine like Bing Travel or Kayak that searches multiple sites -- including Orbitz and American -- at the same time."