Lessons from the American Airlines-Orbitz Split

American Airlines, one of the world’s largest air carriers, has announced that it will no longer list its flights on consumer websites powered by Orbitz. This comes after months of negotiations and discussions failed to end in agreement between the third-party ticket distributor and the respected airline.

The failed deal

For years, there have been disagreements between air carriers and third-party ticket distributers such as Orbitz and Expedia. Until now, though, things had remained fairly stable and nobody made any significant moves one way or the other.

However, this summer American Airlines finally said “enough.” In the words of American Airlines Group Inc. president Scott Kirby, “We have worked tirelessly with Orbitz to reach a deal with the economics that allow us to keep costs low and compete with low-cost carriers.”

Those economics likely included a battle over booking fees. Online agencies continually push for higher booking fees and better referral benefits, while the airlines seek to cut costs in order to stay competitive.

While this has been a major point of contention for several years, nobody has budged very far on either side. When American Airlines pulled out, Orbitz appeared to remain calm.

In its official statement, Orbitz said it offers “hundreds of airlines which are eager to capture the revenue American is choosing to forego. We will continue to show our customers a broad range of flight options to thousands of destinations in the U.S. and worldwide.”

Lessons from the breakup

While the schism might be unnerving, much can be learned from it in a practical sense. Here are a few business lessons everyone might take from what’s unfolding:

  • Stick to your guns. While the financial magnitude of this event may not be fully apparent for months, American Airlines’ ability to stick to its position and walk away from the table is worthy of respect. In fact, it’s probably something everyone should practice from time to time. By not giving in to or balking at Orbitz’s refusal to meet its demands, American Airlines showed both employees and customers that the carrier believes in staying true to its core values and mission.
  • Always wear a smile. While Orbitz has to be a frustrated and disappointed that American Airlines is pulling its fares from the site, the online ticket distributor knows it can’t make the situation any better by sitting around and sulking or pointing fingers. Recognizing this, Orbitz took full advantage in its response to American’s move and made a statement that exuded confidence and determination.
  • Publicity is good. The maxim that any publicity is good publicity likely holds true in this case. How many new visitors have wandered over to Orbitz.com to check on how the site is doing? Whether it’s good or bad times, it’s important to build the most easily recognized name you can. In an everyday situation, that may mean creating effective networking tools or investing in advertising. Regardless of how you interpret it, publicity should nearly always be pursued.

Orbitz and American Airlines have been quick to note that all customers who purchased tickets through orbitz.com or cheaptickets.com will still be able to use their tickets as they intended. The split will not affect previous transactions.

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