Shares of online travel agency Orbitz fell almost 18% today after American Airlines threatened to pull its tickets from the service. If American follows through on its threat, other airlines could follow and other retailers like Expedia may also feel the fallout.Orbitz revealed the American threat in a regulatory filing this morning. According to the filing, American notified Orbitz on Monday that it plans to terminate a seven-year agreement to sell tickets through Orbitz on December 1.
About a half hour ago, American replied with a terse press release explaining that its distribution channels must be “cost-effective” and that it wants to look “beyond the current paradigm” when working with partners.
In other words, American is putting the squeeze on.