Northwest and Priceline iron out differences

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Northwest and Priceline.com reached a distribution agreement that makes Northwest's opaque fares available on Priceline for the first time in four years.  

Northwest withdrew opaque inventory from Priceline in May 2002, complaining that Priceline changed its business model when it began experimenting with selling retail and branded airline tickets. Priceline began marketing its retail air program in January 2004.

In November 2004, Northwest took an additional step away from Priceline by removing its retail inventory from Priceline.com and Priceline-owned Lowestfare.com, citing high distribution costs, including GDS fees.

The thaw in relations between Northwest and Priceline evidently reflects the recent contract renewals under which airlines have reduced their GDS bookings fees.

"Priceline.com has developed a supplier-friendly structure and offers marketing opportunities that meet our needs and allows us to broaden the online base of travelers we serve," said Al Lenza, Northwest's vice president of distribution and e-commerce.

Asked to clarify what "supplier-friendly structure" means, Northwest spokesman Roman Blahoski said, "Priceline.com has provided Northwest with competitive distribution economics."

Priceline is also moving to diversify its GDS vendors beyond what was an exclusive arrangement with Worldspan.

In August, Priceline.com began using Sabre, and the GDS began processing some of the online agency's air bookings.

G2 SwitchWorks may begin to handle some Priceline bookings in the near future. 

Northwest continues to provide opaque inventory (when consumers don't know the airline brand when they buy a ticket) to Priceline competitor Hotwire, which is owned by Expedia Inc.

Northwest, however, does not sell published fares on Hotwire.  

To contact reporter Dennis Schaal, send e-mail to [email protected].

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