American Airlines reforges alliance with Expedia

By Aaron Smith, staff writer

NEW YORK (CNNMoney) -- American Airlines patched things up with Expedia, allowing customers to once again shop for American flights on the travel website, the companies said.

The companies said that fare and schedule information on American Airlines and American Eagle, both owned by AMR Corp (AMR, Fortune 500)., is once again available on Expedia (EXPE) and its affiliated website Hotwire.

The agreement fixes a distribution dispute that's been simmering since December, when Expedia pulled American's fares from its website amid a conflict over the use of online travel sites. American had been pushing the use of its own direct connect link.

As the result of the conflict, American severed its relationship with Orbitz (OWW), another online travel platform, back in December. As of Tuesday, American's fares were still absent from the Orbitz site.

American's fares are still available on Priceline, having signed a deal with that company in January.

Expedia's stock rose nearly 4% on the news.

"While the release is light on details, we view this move as positive for Expedia as any contribution from [American] is incremental to management's 2011 guidance," read an investor's note from Youssef Squali, managing director for Jefferies.

Squali estimates that American bookings will contribute 5 to 7 cents to Expedia's annual earnings per share. To top of page

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