If United makes good on its recent comments,
signaling it won't sign a new contract with Expedia Group when the current one
expires Oct. 1, Expedia CEO Mark Okerstrom would find it "bewildering."
Okerstrom addressed the situation on the company's Q1
earnings call Thursday when an analyst asked about it.
Okerstrom said Expedia has entered into a number of strategic
partnerships with airlines that are bringing value to both parties. For
instance, Expedia is working with American Airlines to reduce customer service
costs on the airline's end, as well as thinking about how Expedia could be more
creative to upsell customers into higher fare classes.
"I just think there's tons of opportunity for us to
create value with United," he said.
If United does leave Expedia Group sites, Okerstrom expects that
Expedia wouldn't see too great of an impact. "No one of our carriers represents more than 1% of our
revenue," he said.
Expedia customers are largely carrier-agnostic, the CEO
said.
"When I look at the value that can be created by
expanding the pie as opposed to focusing on dividing it, for both strategic and
economic reasons I would find it completely bewildering if United decided to
not engage in that discussion," Okerstrom said. "But at the end of
the day they've got to make their choice, and we will just move on."
He conjectured that United's competitors would be pleased if
the carrier removes itself from Expedia, "but I think it would be
value-destructive to both of us, and that's not a place where we particularly
want to end up. And I suspect that they really, in their heart of hearts,
don't want to end up there either."
In the first quarter, Expedia reported year-over-year
revenue was up 4% to $2.61 billion. Its net loss was $103 million.