Are online travel agencies headed for extinction?

Posted by George on Sunday, November 11, 2007

Airlines are increasingly selling offering their best deals on their own sites, and not sharing them with Expedia, Travelocity, Kayak, Sidestep, and other online travel agencies (OTAs) and so-called aggregators. Many low cost carriers are now selling all their fares only on their own sites.

It’s pretty clear why this is happening: airlines are forced to pay OTAs and other third party sites a commission when a consumer buys an airfare, just as they used to pay travel agents, who once got a standard 10 percent commission on every airline ticket they sold. If the airlines can skip the middleman, not only do they save the commission expenses, but they build consumer loyalty and drive traffic to their sites.

The US’s two largest airlines, American and Southwest, have both launched computer applications that alert consumers to special deals that can only be bought on their respective sites. But in addition, many other US-based and several large international airlines are increasingly marketing lower fares on their own web sites than they sell on third party sites.

What all this means for the future of online travel agencies and aggregators is anyone’s guess, but if I were in their shoes I’d be sweating. For consumers, this trend results in savings, but also requires them to shop around more, since even an airline offering a discount on its own site may still not always have the lowest fare on any given route.

Also of note, these “private” fares will not be listed on fare comparison listing sites (as opposed to fare search sites) or taken into consideration by fare prediction sites (we take pride in listing them on airfarewatchdog.com, however).

Here’s a run down of airlines that are currently offering great deals on their own sites only.

Air New Zealand (airnewzealand.com)

Savings on routes from Los Angeles to London, and from Los Angeles and San Francisco to both Australia and New Zealand range from $50 to $200 or more, depending on season and route.

AirTransat (airtransat.com)

This Canadian discounter frequently offers ridiculously low fares between Canada and Europe on their site but nowhere else. These deals are usually for well-specified travel dates, often at short notice.

Alaska (alaskaairlines.com)

Sign up for their newsletter and you’ll receive alerts about promo codes, which change every few weeks, with savings typically of 20 percent.

Allegiant  (allegiantair.com)

This airline, which mostly flies to/from Las Vegas, Orlando, and St. Petersburg only sells fares on its own site. Sign up for their newsletters.

American (aa.com)

AA recently launched DealFinder, which offers discounts typically of 20-25% on various routes. This tool works on most Windows computers but not Macs and requires that you download software.

Cathay Pacific (cathaypacific.com or cathayusa.com)

Has frequent “deals of the month” at prices considerably lower than listed elsewhere, mostly from the US to Asia, but also from New York to Vancouver. Savings range from $60 to $200 or more roundtrip.

Frontier (flyfrontier.com)

Frontier’s weekend deals are only available on its own site. They occasionally sell non-weekend fares at discounts too.

JetBlue (jetlbue.com)

This carrier’s fares are not listed on Orbitz, and although they do appear on Travelocity, Sidestep, Kayak, and Cheapair, among others, we frequently see special deals available only on their site. Recently, for example, they were offering $30 off each roundtrip booked via a special link on their site for passengers buying fares with an American Express Card.

SAS (flysas.com)

We’ve seen flights from Newark to Europe, but sometimes from other US gateways for hundreds less on SAS’s site. Newark to Stockholm is a route that frequently goes on sale.

SkyBus (skybus.com)

Famous for its $10 one-way fares, this new entrant sells fares only on its own site.

Singapore (singaporeair.com)

Not only does Singapore often have lower fares on its site, but we often find that seat availability is better (for example, you might get a nonstop flight on their site for less than a connecting flight on another site).

Southwest (southwest.com)

Visit southwest.con/ding and sign up for an applet that alerts you, often once or twice a day, to short-lived sales that are only available to Ding! users. Fares are typically $10-$30 lower than Southwest’s other fares. Whether Ding! or not, Southwest lists and sells its fares only on its own web site.

Spirit (spiritair.com)

This spunky low cost carrier has almost weekly sales with fares as low as a penny (plus tax, of course), for specific dates, sometimes far into the future. Typically the lowest fares are only available for 4 to 6 travel dates in each direction, but other deals are available over a broader travel period. Join their $9 Fare Club (trial memberships cost $9, or free if you apply for their branded credit card) and you’ll have a wider choice of fares, all of which are bookable on site only.

USA3000 (usa3000.com)

Frequently offers coupon codes, generally $10 off each one-way fare. This airline’s fares are not listed on all OTAs but they do appear on Sidestep.

Virgin America (virginamerica.com)

Recently had a 10% off sale for members of its frequent flyer program only, available only on Virgin America’s site, followed by a 25% discount systemwide.

WestJet (westjet.com)

Occasionally offers promo codes, such as a recent 20 percent insider deal, applicable even to already low sale fares, on flights between Orlando and its Canadian destinations.

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