Looking to buy a flight on American Airlines? Don’t go to Orbitz. The carrier has pulled its fares off all “consumer-facing” sites powered by the OTA; business portal sites operated by Orbitz will still have the AA options. US Airways-marketed flights are expected to follow next week, assuming an agreement is not reached.
In a statement released today AA made it clear that this is a battle about the distribution costs they pay to Orbitz for bookings the OTA provides:
Our goal is to keep fares low for customers while remaining competitive with low-cost carriers. We were unable to reach a deal with Orbitz with economics that allow us to do that. We will immediately cease distributing American Airlines fares via Orbitz consumer websites.
This is not the first time such a battle between AA and an OTA has made it this far. Back in December 2010 a similar spat made it into public view, with AA pulling their fares off of Orbitz then as well. That fight was eventually settled and the AA inventory returned to Orbitz. Seems that must have been a three-year deal as we’re back to the fighting and, sadly, customers will lose. Worth noting that one lawsuit between the companies was settled last year, though apparently not settled enough.
There’s more to it than just the commissions paid on the ticket sales transactions. American is also pushing to get its ancillary products into the OTA sales pipeline. American and Priceline have set up such a system and they’ve been making decent numbers on that so it is no surprise that they want to see the effort expand. Alas, not all the OTAs are willing to invest in the resources to make that happen.
Incidents like this are a good reminder of the challenges consumers are likely to face in the near future as IATA resolution 787 and the New Distribution Capability (NDC) systems are put into place. NDC will enable sales of ancillary products through 3rd party systems which is a good thing. But it will also allow the airlines more control than ever about what inventory and fares to offer up to which customers. Today the moves are wholesale – pull all the flights from a sales channel – while the future offers up the potential to only pull certain flights or specific fares. But there will be one bit of consistency: Customers are still lined up to lose.
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actually it’s AA that would lose, not the consumers. a kayaker who isn’t loyal to AA would simply pick another carrier of equal pricing such as Delta United Jetblue etc.
But a Kayaker might not check AA.com or other OTAs, so American could (not that they ever would) have a fare at half the price of all the airlines, but that customer doesn’t see that option. I think AA will lose in this deal and consumers probably won’t fare much better.
The fares will continue to show on Kayak thanks to a DirectConnect agreement between the two so that’s a pretty bad example.
That said, any time a company attempts to obscure information from passengers it is the consumer who loses. And, while that may not be AA’s goal here (they’re claiming the opposite, that they are trying to keep fares low by keeping costs down) that will be the net effect so long as passengers are not shown a full set of data when they ask for it.