In snubbing the online travel agent industry by signing on to American Airline's Direct Connect reservation system, priceline.com
Even considering recent developments, the airline industry's future doesn't seem less likely to involve online travel agents (OTAs) accessing every airline's individual reservation system to get fare information. Rather, the model seems to be based on the agreement Expedia
American parent AMR
Yet opposition to American's plan is broad. A new coalition calling itself the Open Allies for Airfare Transparency recently came out against the Direct Connect model, and could ultimately hurt Priceline's business. Not only does the coalition include its rivals and the GDS operators that Priceline relies upon for fare information, but major corporations like Oracle
It would be better for all parties if AMR followed US Airways' lead and gave a little to get a little. US Airways will now offer all of its content to the GDS operators and in return Expedia will distribute US Airways' Choice Seats program through new channels, such as Expedia's online travel marketplace. This gives the airline the opportunity to have more people exposed to the chance to buy more products (e.g., seating upgrades).
By flying into the headwind created by AMR's Direct Connect plan, Priceline may find itself getting grounded among its industry peers and the GDS operators it needs to function. Travelport says it expects travel agencies to honor their commitment to the GDS. Flying on a wing and a prayer may leave Priceline on the tarmac if the industry settles this amicably.
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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. priceline.com is a Motley Fool Stock Advisor pick. The Fool owns shares of Oracle. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.. The Motley Fool has a disclosure policy.