US Airways and Expedia announced (21-Jan-2011) they have signed a multi-year strategic partnership agreement to continue offering US Airways' full range of products and services, including all fares and inventory, through Expedia, Hotwire and Egencia sites around the world. Under the agreement, US Airways has committed to offer all of its content to Expedia through the global distribution system (GDS) model, a central reservation system which is used by travel agencies to search and book travel. In addition, Expedia has committed to working with US Airways to enable the distribution of its Choice Seats product through new channels, including the Expedia online travel marketplace. Meanwhile, Expedia previously announced it has suspended the sale of American Airlines tickets from its website and stated the carrier’s new direct marketing strategy is “anti-consumer and anti-choice” (AFP, 03-Jan-2011). Expedia added that its remains “open to doing business with American Airlines on terms that are satisfactory to Expedia”. American Airlines announced on 29-Dec-2010 that it has seen a year-over-year increase in ticket sales since 21-Dec-2010, when it removed its schedules and airfares for American Airlines and American Eagle services from orbitz.com and websites powered by Orbitz, and since 23-Dec-2010, when Expedia began listing American's services and schedules lower in the search display than those of other airlines. [more]
US Airways and Expedia sign new multi-year partnership
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US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.