As I see it, the online travel agencies’ decision to pull the carrier’s fares from their sites is more like an NFL lockout than a negotiating ploy.
And that’s what I said on a conference call Friday morning (1-7-11) with analysts from the St. Louis-based financial services firm Stifel Nicolaus, describing the dispute between American Airlines and Orbitz and Expedia (lately joined by global airfare distributor Sabre).
I also said this is one of the craziest situations I’ve ever seen. In fact, if you had told me even just a month ago that we’d ever see Orbitz and Expedia arm-in-arm, I would have laughed out loud. But, that’s what’s happened. Let me dig a little deeper into this story.
At the heart of the dispute, I think, are two things: money and control.
American Airlines presumably thinks it’s paying too much in fees to these giants of the online travel agency industry (OTAs) for displaying the carrier’s fares, and American would like consumers to go to the AA website; this would allow the airline to avoid the fees it pays to OTAs, plus it would allow American to invite consumers to sample a broader range of its fee-based services such as early boarding and front-of-the-cabin seating which would help the airline generate more revenue.
However, for an aggregator like Expedia, for example, displaying the full panoply of fee options by all airlines and comparing them would be a nightmare.
Meanwhile, there are two points I’d like to make right now, just so there is no confusion – especially for all you airfare shoppers out there:
- FareCompare has American Airlines prices. FareCompare.com will continue to provide shopper with prices for American Airlines and other carriers, even though two of our fine partners, Orbitz and Expedia do not (at the moment, anyway).
- FareCompare takes no sides in this dispute. Actually, we do take one side: we are always on the side of the consumer. Helping people make the best airfare shopping decision possible is what FareCompare is all about.
So what does this all mean for airfare shoppers?
To some extent, this dispute means it will be harder for passengers to comparison shop. Anytime shoppers lose an outlet (or two or three) they have fewer ways to directly compare airfare prices, so, they lose out. Worst case scenario would be a return to the bad old days (remember phoning one airline after another, in an attempt to find the best price to your destination?); and who knows, perhaps this will mean a shift in the balance of power for the next decade.
However, I suspect this will all shake out by the third quarter of this year. We shall see.
In the meantime, will American tickets purchased on Orbitz or Expedia be honored? Absolutely. However, changes to tickets purchased on Orbitz must be made through AA reservations, while changes to tickets made on Expedia must be handled thru Expedia customer support.