In the near term, may be no major impact (visible to their respective users anyway, though there will be ripples under the hood.) Longer term, generally some flavor of bad. However, as others have mentioned, one silver lining in this event is that it may increase demand for some sort of pseudo-ITA replacement company upstart to slide in sideways and takeover providing this service. Perhaps new ventures will be formed to do exactly this. But there will also be chilling effects on other enterprises and projects. So it's really hard to say.
It definitely takes Google one step closer to a position where they can make Kayak/Orbitz-like sites a little more irrelevant. Are they all the way there yet? Of course not. Also, Google has a track record of being pretty shitty in certain areas (like customer service, especially human contact, voices and bodies, etc.) and so those are areas where they can still differentiate. Plus, there's still no sign of Google wanting to get into taking the booking orders. Just the fare/trip search. Search of any kind is something that clearly their infrastructure and scale is going to have massive competitive advantages in delivering. Booking: not really. And many OTA's and metasearch sites make their profit on booking fees and kickbacks, not really on search itself, which for them is more of a cost center (though they do sometimes monetize those use cases too in various ways as well -- this is where they will hurt the most, in medium term).
Also, Google has said it plans to honor the existing ITA contracts. But who knows how long or how pervasive that will be in the future. I personally know of one startup that came very close to signing a contract to get service from ITA and we actually backed down ultimately, in part, because of the fear of lock-in to their service. Plus they were expensive. ITA is/was a bit like the Oracle of fare search products. Good shit, but really expensive shit. At least for a wee little startup.
I wonder what this means for Kayak/Bing/Orbitz