Online travel-booking company, Expedia Inc. (EXPE) entered into a partnership with Amadeus, a leading global distribution system ("GDS"), in a bid to offer customers airline branded fares in 2015. Shares of Expedia jumped nearly 2%, touching a high of $87.32, before closing a notch lower at $84.69.

Passengers will be able to search for and buy branded fares from select airlines by mid 2015. Expedia’s alliance with Amadeus will give consumers the leeway to choose fares in accordance with the options that are most relevant to them at the time of purchase. Moreover, it will enable the participating airlines to effortlessly offer their branded fares to customers.

Previously, airline companies used to distinguish themselves by providing exclusive branded fares that varied from basic, seat-only options to premium fares including features such as flexible change and refund policies. But today, with branded fares evolving, many carriers offer more choices like launching fare products which include traditional premium elements with new perks such as confirmed seating, premium seating, checked bags and in-flight services.

To counter the increasing competition in the online travel industry, Expedia has been making acquisitions and entering into strategic alliances. In June, Expedia agreed to acquire a European online car rental company — Auto Escape Group — to expand into the European car rental market. In 2013, Expedia signed a strategic long-term marketing partnership with Travelocity to share the workload related to searches, bookings and promotion.

It recently completed the acquisition of Wotif.com Holdings Ltd. Australia-based Wotif.com is an online travel company that offers hotel rooms, airline tickets, and vacation packages in more than 69 countries.

The overall travel market is robust and evolving very rapidly. We believe that these alliances and acquisitions will help Expedia grow in the future to deliver above market growth rates even in the presence of increasing competition from Orbitz Worldwide (OWW), Ctrip (CTRP) and Priceline (PCLN).

Expedia has a Zacks Rank #3 (Hold).

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