I’ve been watching the little tiff between American Airlines and Orbitz (and now Expedia) with great interest. Frankly, it’s almost entertaining to me. I won’t come down solidly on the side of anyone in this battle. Honestly, I “get” why American would like to reduce its distribution costs, but I also “get” why Orbitz doesn’t want to give away the store so to speak. The fact that Expedia entered the fray by making American’s flights harder to find on its website is just icing on the cake for what is sure to be an exciting 2011 for airlines and those who sell the majority of their product.
Let’s face it folks, AA.com doesn’t carry the same kind of cachet that southwest.com does. Brand loyalists like me might automatically go to AA.com to purchase their AA travel, but most of the world is not me. Online travel agencies (OTA’s) are a big chunk of revenue sales for your average airline, and American is just that, an average airline. They’re no longer the biggest kid on the block. Now, if the other airlines jump on board behind American and start playing tough with the OTA’s, then American may be on to something. On the other hand, if the rest of the airlines leave American swinging in the wind, then American will find itself eating a crow sandwich for Christmas dinner. Sit back, relax, and enjoy the fight. It’s going to be entertaining for airline geeks like me to watch.
I fly out of BOS and travel to PHL frequently and this
can’t be booked directly through AA unless you do a multi-city
which always comes up as a higher fare than a forced routing
through Orbitz or Expedia. I’m EXP with AA and try to stay as loyal
as possible but if the prices are prohibitive through AA I will
have to use a different carrier and that would suck.
I most definitely think that AA has more to lose than Expedia or Orbitz in this case. The volume of revenue is not trivial for the OTAs but it is tremendously higher for the airline and that’s a huge risk. Yes, the GDS booking fees are a very real cost and every airline does what it can to drive bookings in-house, but there are simply a large number of customers who are either never going to consider going direct or who have no choice. The ignorant or the folks who shop only on price are going to use a comparison… Read more »