AA-Expedia Accord: Who Caved First?

American and Expedia have begun working together again after a three-month separation. The question is: does their rapprochement signal that Expedia caved in on the direct-connect issue? Or does it indicate that American was losing too many bookings by staying out of the largest online travel agency?

The answer may lie elsewhere.

After signing a memorandum of understanding with Expedia, American has had its fares and schedules restored to Expedia and Hotwire sites worldwide.

American undoubtedly had taken a hit from being at war with two of the top three online agencies. For its part, Expedia has called the absence of a major carrier on its sites a “bump in the road.”

Perhaps Expedia and American came to the realization that the dispute was providing no benefit to either of them, so they might as well set it aside for now.

Using GDS technology
According to a brief joint statement about the agreement, American’s information will “initially” be provided to Expedia via GDS technology.

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

The GDS was not named, and a date for the transition was not specified.

Neither American nor Expedia is disclosing additional details about this plan.

All three GDSs have “aggregation” technology; aggregation of data is what they have been doing for a living for 40 years.

And it is not all legacy technology: All three GDSs use XML to connect with low-cost carriers and to access ancillary products; XML is the technology on which American’s Direct Connect is based. The new agency desktops that have been or will be rolled out are multisource systems that deploy new technologies.

American’s other battles
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 maneuvers until June 1.

American is still at odds with Orbitz and its largest shareholder, Travelport.

Marriage tools not ready
American has said its rationale for insisting on direct connections to online agencies and travel management companies is that GDSs would not be able to accommodate the “secret sauce” of its merchandising strategy.

It plans to marry its proprietary customer data to its menu of ancillary products to assemble customized offers dynamically, based on passengers’ status, history and preferences.

If it seems as though American and Expedia are in no rush to resolve that issue, it may be because the piece of technology that will perform that marriage – an “availability engine” is still under construction by ITA Software.