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    Home / New Developments

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    New Developments

    Airlines Stand Up to Internet Discounters

    December 12, 2003

    US Airways says it's bailing out of Expedia, the Internet's top travel site, starting Tuesday in the latest dust-up between airlines and e-commerce discounters.

    US Airways yanked its listings from Expedia after the Web site started charging its customers $8.99 for each booking - a $3.99 increase - during the Thanksgiving holiday. That put US Airways at a price disadvantage against other airlines' fares on Expedia. All other airlines' customers still pay Expedia $5 to book a flight.

    Expedia and US Airways officials say the higher charge relates to unsettled issues on a new contract to replace the one that expired in June. Negotiations are continuing.

    "They felt they needed to exert some sort of pressure on us," says Ben Baldanza, a US Airways senior vice president. "We don't think they are playing fair."

    Expedia spokeswoman Andrea Riggs says the company considers US Airways "a valued partner as we are striving to work this situation out."

    Other airlines have tussled with Web sites too:

    • Northwest pulled its listings from the Cheap Tickets Web site last month in a dispute about how they were displayed.

    The airline briefly stopped selling its tickets over Expedia in 2002 when the two companies were unable to reach agreement on a contract. That dispute, as does US Airways', centered on how much Northwest would pay Expedia for each ticket sold.

    • Southwest steered more bookings to its Web site by pulling its prices from a major distribution network in July 2001. The network was the Airline Tariff Publishing Co., better known as ATPCO, which makes fares and schedules available to travel agents and Internet travel sites. The move came after Southwest sued Orbitz, the Internet travel booking site owned by five major airlines, seeking to have its fares and flight listings taken off the site.

    • JetBlue has gradually removed itself from major travel Web sites in the past two years, although it says it still provides fare and schedule information to travel agents via the Sabre distribution system. Today, the airline sells 75% of its tickets on its Web site.

    US Airways reports that Expedia produced 2% to 3% of the airline's sales - about $280 million - in the 12 months ended Sept. 30.

    But Expedia was one of the most expensive sales channels for US Airways, Baldanza says.

    The airline is struggling financially despite emerging from bankruptcy reorganization this year.

    "There's obviously some risk in this for us, but we feel strongly the revenue through Expedia is replaceable through other sources," Baldanza says.

    Sources: USA TODAY

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