United Airlines has again threatened to pull all of its flights from travel site Expedia.
This comes after the website and United failed to reach an agreement on a new contract… but the website is still selling tickets for flights it has no right to sell.
Why are United and Expedia at odds?
Airlines rely on travel websites like Expedia to help sell their tickets, but this relationship comes at a cost as the sites take a cut of the revenue. Naturally, as a ticket for a flight is the same on an airlines website and Expedia, it’s better for the airline if passengers book through their website than giving a portion of their profit away.
To decide how much profit these websites get, the airlines negotiate various contracts with different sites hoping to get the rate as low as possible. In the case of Expedia and United, so far they have not been able to reach a middle ground on just how much commission Expedia will receive.
And if they don’t have a contract, United has every right to stop selling tickets on the site. As the next contract as not been agreed, it would be bad form for Expedia to keep selling tickets beyond the termination date of the current contract… which is what they are doing.
What is United threatening to do?
United has taken the stance that if Expedia won’t sign up to the terms they are offering, then they will refuse any bookings from the website and sell the tickets themselves.
The carrier issued this statement:
“Expedia has historically been very good in selling our lowest fares but quite obviously, we think we can sell our lowest fares just as well. We look forward to having a direct relationship with our customers going forward, and that’s really where we are with Expedia.”
What would this mean for Expedia?
The site might list a flight, but passengers will never get a confirmation email from the airline. This would be a huge blow for the site as they would no longer offer ‘every flight possible’ and would lose customers. Website Skift estimates that Expedia sells around 8.5 million domestic seats onboard United flights per year and that they make $90m in commissions.
From these figures, it makes perfect sense why the website is refusing to give up selling these flights until the very last minute. But we should take this loss with a pinch of salt, as if United flights were not listed on the site, it is unknown if these passengers would even know about the fare and might look elsewhere… like other fares available on Expedia.
Right now, it’s a game of chicken between the two, and remains to be seen who will blink first.
What do you think? Let us know in the comments below!