So you’ve probably seen the fallout from a court ruling on the battle between Chicago’s on-line travel agency (OTA) and Fort Worth’s American Airlines. Orbitz dropped American’s fares from its display after the two sides couldn’t come to terms on how much American pays Orbitz for the service.

It seemed to be contained to Orbitz until today when big gun OTA “de-preferenced” American’s fares on its site, and it turns out Expedia’s about to have its contract with American end shortly. Some are calling this a “shot across the bow.” Enjoy the tough talk from Expedia:

American Airlines has shown it only intends to do business with travel agencies through a new model that is anti-consumer and anti-choice.

“We believe American Airlines’ proposed direct connect model will result in higher costs and reduced transparency for consumers, making it difficult to compare AA ticket prices and options with offerings by other airlines.

“American Airlines’ direct connect model is of questionable, if any, benefit to travelers, costly to build and maintain and would compromise travel agents’ ability to provide travelers with the best selection.”

I’ve pinged American but not sure we’ll get a response at this point and most companies are winding down normal operations ahead of the holidays.

What we’ve also seen with Delta Air Lines, the No. 2 carrier in the world, is the Atlanta-based carrier dropping its distribution deals with a host of smaller OTAs that it felt weren’t giving it much bang for the buck. Delta, like American, wants customers to book directly through its website.

Let me just make a quick 2011 prediction: Year of the Airline Distribution Wars. It sure seems like we’re headed that way. We’ve got airlines who are apparently choosing to take their inventory and distribute it through their own lower-cost channels and who are not seeing the value having to pay OTAs

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