Risk & Compliance

Judge Sides With United in Expedia Contract Case

Expedia failed in its bid to maintain access to data for United flights scheduled after the companies' ticketing agreement expires.
Matthew HellerApril 8, 2019

A judge has declined to enjoin United Airlines from terminating Expedia’s access to data for flights scheduled after the ticketing agreement between the companies expires on Sept. 30.

U.S. District Judge Kevin Castel said Expedia had shown a “likelihood of success” on the merits of its breach of contract case against United but did not show a preliminary injunction was needed to avoid irreparable harm or serve the public interest.

With the expiration of the companies’ 2011 agreement looming, United had informed Expedia last October that it intended to cut the online ticketer’s access to flights scheduled after Sept. 30. Such a move would leave Expedia unable to book or change tickets.

Expedia retaliated with a lawsuit on Feb. 4, accusing the airline of “a brazen attempt to force Expedia to renegotiate the agreement’s economic terms, with which United is unsatisfied.”

“The dispute came as some carriers try to reduce distribution costs by encouraging travelers to book directly rather than through online travel agencies” such as Expedia, Reuters said, noting that JetBlue pulled its fares from several online agencies in 2017.

In his ruling on Expedia’s motion for a preliminary injunction, Judge Castel said Expedia was likely to prevail on the merits of the case because there was no language in its agreement with United to suggest that during the last 11 months or so of the contract, “United would stop offering Expedia any fare or availability information or customer service responsibilities.”

But he disagreed with Expedia’s argument that it would face irreparable harm based on loss of reputation because of the confusion and delay resulting from its inability to provide customer services such as changes in ticketing for United’s flights after Sept. 30.

“[T]his harm is not a result of any alleged breach of the agreement, but rather a result of the natural contractual expiration of the agreement,” the judge ruled, adding that “The parties contracted for a fixed term and did not include provisions discussing customer service of tickets purchased through Expedia after the expiration of the agreement.”