Airlines Play Hide and Seek with Their Airfares. Is It Fair?

George Hobica, January 30, 2017
Fares from Washington DC, District of Columbia:

    Many consumers aren’t aware that when they search for a low airfare with an online travel agency (OTA) such as Travelocity or a popular search app such as Hopper, Kayak or Farecompare, they may not be seeing the lowest possible airfares.



    In fact, if they use these sites to buy airfare from or to an airport such as Atlanta, where Delta commands over 80% of the market, or Kansas City, where Southwest controls 50% of traffic, it’s almost certain many of them will pay more than they should.

    But don’t blame the aforementioned websites and apps. If anyone is to “blame” it’s the airlines themselves.

    Delta and Southwest, which together control about 35% of U.S. domestic seats, are the main culprits here. Southwest one would expect. The airline has never  displayed its airfares anywhere other than Southwest.com, except for a brief period on Travelocity.com and via the Easy Sabre search app, a consumer product in existence from 1986 to 1999.

    But Delta is a relative newcomer to the airfare hide and seek game. The Atlanta-based carrier now withholds its airfare data from popular apps and sites including Farecompare, Hipmunk and Hopper among other lesser known ones (American in the past has withheld its fare data, for various reasons, from OTAs such as Orbitz.com).

    So many consumers are not getting the full airfare picture and it has become much harder to compare prices; many are overpaying for flights, or simply cannot afford to fly unless they know where and how to search. It’s impossible to calculate the cost to airfare buyers but it’s probably costs them billions over the years.

    Consider: One day I was searching for a flight between Austin and Newark; on Southwest.com the dates and flight times I decided on would cost $216 round-trip, while the least expensive comparable itinerary (same dates and flight times) on United found via Google Flights, which doesn’t include Southwest, was $763 round-trip.

    Should airfare availability be regulated?

    The U.S. D.O.T. is looking into the issue of airlines withholding prices from third party websites and apps, but should the airlines be singled out here?

    As Vaughn Jennings, spokesman for Airlines for America, the lobbying group for U.S. airlines, told the Minneapolis Star Tribune’s Kristen Leigh Painter in January, “We continue to believe that airlines, like all other private businesses, have the right to sell their product where and how they choose.”

    Sad to say, there are precedents. Some hit songs are only available on iTunes—or not on iTunes (think back to the many years that the Beatles’ catalog was withheld from Apple’s music service). Fashion designers such as Marc Anthony can negotiate exclusive marketing deals with retailers such as Kohls, and Martha Stewart can decide to sell her products exclusively at Kmart.

    It's a bit of a false equivalence though. No consumers are overpaying because of these other marketing agreements and show me the shopper who cares that, or who has suffered a financial hardship because, she cannot buy a Louis Vuitton handbag at Target.
     
    Even so, many consumers understandably assume that when they go to an airfare comparison website or app they will compare all airlines.

    The real worry is that this spreads like a contagion, Delta restricts larger sites like Priceline and Expedia from showing its fares, and then United and American follow. The airline industry is nothing if not a monkey-see, monkey-do industry (one adds a checked bag fee, they all do). Imagine if all airlines restrict airfare distribution: it would be a disaster for consumers. And then watch the hotel and car rental industries attempt the same thing.

    Will we see government regulation? With new leadership in Washington we'll probably see fewer not more fetters placed on businesses. So it's consumer beware and be wise, unless the new President sees this for the consumer issue that it really is. Who knows, maybe he’ll tweet that the airlines need to stop making it harder for consumers to find the lowest airfares.

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