Editorials Great expectations March 13, 1999 Share 1 -- American Express and Continental Airlines apparently fell short of the expectations raised by their ambitious experiment with a blocked-space deal on Virgin Atlantic. In mid-1998, American Express purchased inventory on Continental's code-share service to London on Virgin Atlantic from several U.S. cities.The deal provided American Express with exclusive access to seats at a significant discount, seats that it then would resell to clients at a markup.But despite its marketing clout and abundant financial resources, the travel agency giant was unable to move enough inventory to make the program work. As a result, the deal was renegotiated several weeks ago.Under the new terms, American Express no longer will assume risk on the Virgin Atlantic flights. In exchange, it loses exclusive rights to the seats. At the same time, it appears that the discount provided by Continental is less attractive than before.There is a lesson to be learned here, and it is this: No matter how good a deal looks, corporations have concerns beyond price.For one thing, many businesses have airline contracts to satisfy. To get a pricing discount, they often must meet specific market-share or volume targets. Some corporations obviously saw this agreement as a threat to these contracts. On top of that, market forces, such as the Asian economic meltdown, forced companies to cut back on travel. Deflated Asian currencies made air travel too expensive for others. Consequently, several carriers shifted wide-body jets out of Asia into European markets.Faced with resultant increases in transatlantic capacity, Continental is selling upper class code-share seats to London at almost 75% off.The airline says there is no direct connection to the American Express deal, but something, somewhere seems to have gone awry.