The Value of a Platform to a Seller: The Case of American Airlines and Online Travel Agencies

We examine the financial consequences of a reseller excluding a supplier. The American Airlines (AA) dispute with Expedia and Orbitz provides a natural experiment since AA travel options were suspended during the first and second quarters of 2011. We find AA domestic fares were lower than similar fares charged by its main competitors, with the effect most clearly pronounced on one-stop markets. We estimate the carrier’s revenue loss due to this conflict at $122‐$133 million. We find lower AA fares persisted in the third quarter of 2011 after the dispute resolution, suggesting financial difficulties at AA lower fares.