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American sues Kayak.com, Kayak responds

Posted by George on Thursday, September 04, 2008


In case you missed it, American Airlines and Kayak.com are no longer friends. The short of it is that Kayak, when they list fare search results, sometimes send you directly to the airline's web site, but sometimes they offer a choice of booking with Cheaptickets.com or Orbitz.com. Of course, you'll pay $6 or $7 extra when you book with a third party (it's a convenience fee of sorts).

But what we don't understand is why wouldn't you go directly to Orbitz or Cheaptickets? Why go to Kayak and then to Orbitz when it's really the same fare?

Seems like American didn't get it either, and insisted that Kayak only list American as a vendor. As a result, Kayak pulled American's fares. AA, in its original suit, claims that Kayak was continuing to list its fares, but we don't see any evidence of that. AA wants Kayak to stop using its name, logo, and flight information.

Of course the reason that Kayak includes those other sites is because that's how they make money. They also make money by checking-by-default a pop up window to Priceline.com. (In our opinion, that's a bit naughty: we'll check the box ourselves, thanks, if we want to search Priceline.)

Kayak claims (PDF format) that they stopped listing AA because of "American's demand for incomplete, and therefore biased, search results." Frankly, we don't see how not sending customers to a fare on Orbitz or Cheaptickets that's $6 or $7 higher is incomplete or biased. In Kayak's answer to AA's law suit, it claims that "American Airlnes published false statements concerning Kayak's economic interests" and that AA "intentionally interfered with Kayak's former and prospective customers...thereby causing Kayak to suffer actual damage."

This is great stuff! Basically, it's all about money and, in our opinion, not so much about the user experience on Kayak. When Kayak first began, we thought the whole idea was to send users directly to the airlines, distinguishing the site from Travelocity, Orbitz, and so on. But perhaps there was not enough revenue in that model so they changed the process?

For a while, Kayak was listing fares on Southwest as well, but Southwest didn't like that, and now they just have a link to Southwest's site when you search for fares on routes served by Southwest. Clearly, the absence of American's fares on Kayak makes the site less useful.

And as one consumer commented on this issue:

"AA is not objecting to Kayak or Sidestep from selling tickets on AA, it’s the manner in which they are selling them. Based on the law suit Kayak is not selling the tickets based on the agreement in which they signed on to sell AA tickets. They are taking you, the consumer, to third party sites to sell the tickets and their agreement is to sell them from AA.com. By sending people to these third party sites AA is incurring additional fees to sell you the ticket which in turns makes ticket prices higher verses their own ticketing channel. From what I can tell Kayak was getting a preferred kick back from these thrid party sites to run the tickets through them and not AA.

So before you start blasting, read up on the subject before you make yourself look like a bumbling, overly emitional consumer.

I think AA is in the right on this one for a change…"

We would have to agree.

 



Discussion: 5 Comments

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I don't know the legal aspects of the business agreements, and that does matter, of course. From the viewpoint of the consumer, however, kayak is very useful in principle. The idea is to avoid having to check more than a dozen websites to find the best fares on particular routes on particular days.


by Dave on Friday, September 05, 2008



I don't see why Kayak should be faulted for trying to make money. Perhaps some customers might prefer going right to Orbitz since they have a profile already filled in on that site for their family with multi- frequent flyer numbers, etc and choose to pay the booking fee for this ease of use. Orbitz can be used to book many different carriers, not just aa. So I would not assume that people don't want to go to Orbitz.

So what is priceline.com pays a premium to be the default second search engine? there is no booking fee. What is the big deal?

I think you all have your hair on fire over nothing. Business is Business. Give Kayak a break! They have saved us lots of money.


by Chris on Friday, September 05, 2008



Why go to Kayak rather than Orbitz or another site? Simple. Kayak makes it easy to find fares based on more criteria than any other site. Being able to say, for example, that I want to leave between 8AM and 1 PM and arrive between 5PM and 9 PM is very useful.


by Scott on Saturday, September 06, 2008



Hmm, I don't think AA or whoever is representing the facts right at all. Kayak includes the results from other travel agent web sites like Orbitz, Cheaptickets, etc because they sometimes have lower fares than the airline. Also, they can sometimes combine fares or fly through nearby airports to create a lower ticket price. For example, for a while AA and UA both had round-trip flights from ORD-IND for ~$65, and IND is usually a cheaper market than ORD, so I would commonly search Kayak and Priceline to see if there was a cheaper routing. As far as the lower price goes, one time when I booked a ticket from STL-SEA, AA listed a higher fare than Orbitz. I booked it on AA after printing out the Orbitz fare rules etc and AA refunded the difference and sent me ~$25 voucher [and charged me $10 for using it BTW :-|].

Anyway, as you can see these other sites have a legitimate claim for being included on Kayak's list of fares. Sure Kayak makes money, you guys make money when I click your help support this site links, we all want to support the good sites and airlines want referrals, so it's a win-win. I think AA just took this too far and was offended when Orbitz etc had lower fares [which may not be available when you click the link on Kayak]. I use Kayak all the time and I never once saw an AA flight that didn't have a link to AA.com, even if it was more expensive. In fact, AA flight would usually come up first, I'm assuming because their web server responded first with results. AA is just having a hissyfit, which as we know now is all resolved, apparently.

Thanks for the post guys, I just wouldn't make a judgement on a case that was pending. A lot of he said, she said stuff, with no real proof.

@Matthew


by Matthew Weyer on Monday, November 03, 2008



You couldn't be more wrong George.

First off, you would want to go to Kayak since Kayak searches a bunch of web sites for you and displays all the results dynamically, allowing multiple ways to sort. Also, sometimes fares on Orbitz and the like come up cheaper than those from the airline web site, sometimes with a different routing, and sometimes because the airline site has already loaded a different fare, and the agent site is still working on an old one, which may or may not be bookable.

And actually, AA is right, because shortly after the dispute broke, I did see AA flights still come through, but only from travel agent web sites like Orbitz. They weren't linking to AA.com at all when the dispute broke, possibly because they were thinking well if AA is going to have a fit, we'll just remove their web site, but still link to the agents since they're publicly accessible, but obviously Kayak's lawyers stepped in and said that's not good enough since technically AA owns the rights to their logo/schedule/whatever. Then anything AA was removed, unless it was through a code share like Alaska [that I noticed at least].

So actually, if Kayak finds a cheaper routing/fare on Orbitz, it IS incomplete and biased for AA to only allow bookings on their web site. Limiting consumers to only aa.com fares for AA flights isn't what Kayak is all about, since they designed their web site in disgust at how confusing and annoying the current travel agent web sites are. Sometimes the same exact flights can be many different prices, not including the booking fees! So, if a site searches multiple web sites, then the likelihood of finding a flight with a good price/time is increased.

Although I don't remember seeing a blog post or anything positive about Kayak, it's good to know you thought the Kayak idea was good at first. Although they made no such change in their business practices, and if they did start included fares from Orbitz after they started, it was for the simple fact of bringing more choices to the consumer, as most travel agent sites are able to book airfares on multiple airlines in one itinerary, bringing greater time flexibility. Also, price flexibility since some routings through other airlines/cities can bring cheaper fares as well.

As far as the check mark for Priceline, I think that's for the simple fact they're unable to include Priceline options through their main site for some reason as I've never seen an option to book through Priceline like Orbitz and other travel agent sites. Some web sites just don't load nicely into Kayak, and sometimes a consumer has to re-enter their search in the airline/travel agent site to bring up the booking. I think it's great they open the Priceline window, since Priceline is the only travel agent site [not airline site] that doesn't charge a booking fee!

I know for a fact finding airfares on kayak that linked me directly to AA, as AA sent me an e-mail saying "we noticed you used kayak to book your AA tickets one time, and although we're no longer on the site, you can book your tickets at aa.com, and we'll give you 1000 miles when you do". However, aa.com sometimes has higher prices for their flights than Orbitz and the like or aa.com didn't produce certain routings that came up cheaper, so Kayak displays the travel agent web site instead. Often I'll find the same flights that pop up cheaper on a travel agent web site than the airline's site, usually because that agent site didn't upload the new fare code and thus trying to book it will most likely fail or result in an increase.

So your "from what I can tell" statement is really irresponsible since you have no factual data you're presenting to back up your claims, and AA really just had a fit because Kayak was searching so many web sites and presenting people with a CHOICE, instead of only aa.com. If you guys want to really consider yourself a reputable blog that covers the airlines, you need to stop making claims without evidence. I say this because I love your web site, and would like to see you prosper, while still helping consumers in the best possible way.

@Matthew


by matthewsoft on Saturday, December 27, 2008


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