Why did American remove its fares from Orbitz?
By George Hobica
You may remember that back in September 2008, American airlines went after Kayak.com, and yanked their fares from the "meta" airfare search site for a while, until they made nice and kissed. As we understood it at the time, American didn't want Kayak to offer consumers the opportunity to book AA's fares on third-party sites such as Travelocity or Orbitz. Rather, they wanted all AA fares to link directly and only to aa.com, American's web site. The reasons for this are obvious: if a fare is bought on Travelocity or Expedia, then a fee must be paid by the airline. But perhaps less obvious, when consumers go directly to aa.com, they are given the opportunity to buy ancillary items: insurance, rental cars, frequent flyer credit cards, vacations, and other AA flights, all of which AA makes additional revenue from. When consumers go to online travel agencies, those companies make the ancillary revenue.
One thing that an Orbitz or Expedia does that an airline web site such as aa.com doesn't do is inform consumers if their cheapest fare will be flying out on one airline (such as American) and back on another airline (such as Delta). AA.com and Delta.com want to keep you entirely on their route system.
Now, AA is going after Orbitz.com, and after some legal wrangling will no longer list fares on Orbitz (official American Airlines press release). Thus, you'll have to use another source to compare fares, such as TripAdvisor.com/flights, or the aforementioned Kayak.
A few days ago, Delta.com removed fares from CheapoAir and OneTravel. Is this a trend?
Well, let's face it, Southwest Airlines has long sold its fares only on its own web site (Southwest had a tussle with Kayak a few years back, when Kayak decided on its own to search and list Southwest's fares without permission; a cease and desist letter quickly ended the practice). Allegiant Airlines also sells only on its own site. And both airlines are consistently profitable. Maybe the other airlines are taking notice.
So Airfarewatchdog wonders: Airlines cut out bricks and mortar travel agents long ago, refusing to pay a commission; what's taken them so long with online travel agencies and meta-search? What does American really want? Lower fees from Orbitz? To have only aa.com as a booking option when AA fares are listed? Why are they being so hard on Orbitz and not on other websites? When will they go the route of Southwest and sell only on aa.com?
Bottom line, this will make airfare shopping harder for consumers, just like in the old days when you called up each airline in turn to find the lowest fare. This is not a good thing for consumers, especially if it spreads to other airlines and third party sites. But frankly, it's kind of a good thing for Airfarewatchdog.com, which uses people and not computer software to compare and list fares. And as this blog post suggests, it may be good--oh cruel irony!-- for the very travel agents that the airlines shut out so many years ago.
We have a feeling that American and Orbitz will find common ground eventually; meanwhile, if Orbitz is your online travel agency of choice, you'll have to compare fares there and on aa.com. And of course, don't forget to check Southwest.com. And by the way, it's interesting that AA's fares are still being shown on Cheaptickets.com, which is owned by Orbitz. What's that all about?
Update: It looks like the AA kerfuffle with online travel agencies is spreading. You'll see what I mean if you head over to Expedia.com and do a search, such as New York to Miami. See the difference? American's fares are not listed in the usual side-by-side comparison layout. Hmmm.