Expedia Rises After Settlement With American Airlines in Ticketing Dispute
Expedia Inc. (EXPE) rose in Nasdaq trading after resolving a dispute with American Airlines that allows it to immediately resume selling the carrier’s tickets.
The agreement, which was announced yesterday and includes Expedia’s Hotwire unit, is the first resolution of disputes between AMR Corp. (AMR) and several online travel agencies and flight data distributors over American’s plan to use its own Direct Connect technology to distribute schedules and fares.
“This pact appears to be a compromise that gives something back to Expedia while improving AMR’s product display flexibility and control,” James M. Higgins, an analyst for New York-based Soleil Securities, said in a report. Higgins has a “hold” rating on Fort Worth, Texas-based AMR.
American and American Eagle fares will return to Expedia using a traditional global distribution system, or GDS, the companies said yesterday. Expedia eventually will receive American fares, schedules and customized products through Direct Connect. That data will be combined with other airlines’ for display using GDS technology.
Expedia, based in Bellevue, Washington, climbed 29 cents, or 1.3 percent, to $22.72 at 4 p.m. New York time on the Nasdaq Stock Market, the most since March 30. AMR slid 4 cents to $6.23 on the New York Stock Exchange.
Expedia pulled American’s fares and flight schedule from its website and Hotwire on Jan. 1 as part of the dispute over Direct Connect.
American, the third-biggest U.S. carrier, remains in talks with Sabre Holdings Corp. over the use of Direct Connect. The two agreed in January to put a lawsuit filed by American on hold until June 1 as they tried to negotiate an agreement. Sabre operates a global distribution system, compiling airline data and sending it to travel agents.
The airline pulled its data in December from Orbitz Worldwide Inc., another online travel agency.
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net
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