Expedia and AirAsia: Glorified White Label, or the Real Deal?

Expedia may be the world’s largest online travel agency (OTA) in terms of gross bookings but, in many markets around the world, it is a decidedly tier-two player, says research firm PhoCusWright in its latest FYI post examining Expedia’s recent joint-venture agreement with AirAsia.

The move, says PhoCus Wright, gives Expedia new clout in fast-growing markets and has the potential to be a game-changing move, despite competition. In its blog entry, the firm argues that growth in the Asia-Pacific region is particularly untapped and its fast-growing travel market is ripe for online travel agency business.

Excerpts from the blog read:

“The partnership with one of Asia’s leading LCCs [low-cost carriers] is a big win for Expedia. It could be the much-needed impetus the OTA has been seeking to expand within the region. Securing exclusive online third-party distribution rights with AirAsia—especially for markets where the LCC is growing abundantly—gives Expedia a strong hand indeed, and certainly puts other OTAs [online travel agencies] on the defensive.”

“This JV [joint venture] brings together two great brands, but it does not necessarily mean they will work great together. Expedia’s global OTA leadership is not questioned, but it has a mixed record in international expansion. AirAsia certainly knows its market, but it is an airline, not an OTA. It may have strong positioning in APAC [Asia-Pacific], but it is presently bustling with network expansion, upcoming public offerings, plus the launch of a new airline in the Philippines.”

To read more of PhoCus Wright’s take on the AirAsia-Expedia joint venture, visit www.phocuswright.com.


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