Yesterday American Airlines (AA) pulled the right to sell their airline tickets from one of the largest online travel agents, Orbitz. Also, Delta Air Lines Inc. said it would stop selling tickets through three smaller travel websites, CheapOAir.com, OneTravel.com, and BookIt.com. What is going on here?
It certainly isn’t good for consumers.
We already know that anyone who believes the poppycock about the airlines being focused on their passenger service is living in Wonderland. From hiding their ancillary fees from passengers for the past two years as they were rolling hundreds of millions of dollars in extra charges, to this episode of making even airfares more difficult to compare, the airlines are clearly focused on their bottom line.
To hell with customers.
An AA statement after the ruling said, “In today’s competitive marketplace, it is important for American to be free to customize its product offerings to improve the customer experience as well as distribute its products in a way that does not result in unnecessary costs.”
I immediately sent an email to American Airlines asking, “Please give me three ways that this decision by AA will ‘improve the customer experience.’ I’ll include them in my article tomorrow morning. I’m sure that AA has a list of improvements that customers can expect.”
So far, AA has not provided an answer.
The Consumer Travel Alliance noted after the AA/Orbitz ruling yesterday that allowed American Airlines to pull their tickets from one of the largest online travel agents in the world was anti-consumer and restricted informed choice.
American appears to have no idea why we fly. We fly to get from point A to point B in the most convenient and cost-effective manner possible. We don’t fly to be manipulated by proprietary airline reservation systems that limit our choices, prevent comparison shopping, and hide the real cost of travel.
American should end its strong-arm tactics and abandon this anti-consumer direct connect program. The Consumer Travel Alliance encourages American to launch a renewed effort to listen to its customers and partners about the services they actually want and need, instead of trying to force feed us a ‘direct connect’ to higher prices, less choice, and limited competition.
So far, United/Continental hasn’t made any announcements about other travel agents that will be cut off. But, you can be sure they are watching the drama unfold between AA and Orbitz; less-so Delta’s moves.
Ever since consumers appeared poised to gain additional airline fee transparency in the proposed rulemaking being considered by the Department of Transportation (DOT), airlines have been frantic to find other ways to continue to make buying as complicated as possible. These new agency-by-agency limitations serve only to make the work for consumers trying to compare airfares and airline fees more difficult.
What makes this action by American Airlines even more confusing is that they are managing to irritate some of their biggest corporate clients, who I am sure will be looking to move to friendlier airline providers. Both Delta and United are licking their chops and getting ready to eat American’s corporate-traveler and travel-management-company lunch should AA keep pushing their flawed direct-connect system on unwilling participants.
This focus on the bottom line and a to-hell-with-our-passengers attitude was reflected in a panel discussion at PhocusWright’s annual online travel conference held in Scottsdale, Ariz., last month.
Airline executives from United Airlines, American Airlines and US Airways discussed the contentious world of airline pricing and control of pricing information. They all never mentioned, even once, the passengers who pay for their product.
When I had an opportunity to ask them about ancillary fees and how they can justify hiding these fees from the almost 60 percent of travelers who purchase airline tickets from travel agents, their answers focused only on their need to negotiate the release of these fees to travel agents and GDSs that provide the main computer backbone for the travel agent system.
Notifying passengers of the total cost of travel was not even a parenthetical consideration. In their focus on trying to save money on distribution of airfares and their determination to keep their ancillary fees as totally proprietary information, they are forgetting the passengers.
If AA cannot find it acceptable to allow full airfare comparisons on Orbitz, one of the largest online travel agents, and, ironically, an agency that they helped to create, then consumers should begin to look at booking with other airlines that are, at the least, not openly hostile to their passengers and the free flow of airfare information.
{ 2 comments… read them below or add one }
Why should the consumer continue to pay an extra $3 to $6 in hidden fees to a GDS for every booking made thorugh a GDS? Every segment change, or seat change increases the cost to the airline and the airline then charges customers for the cost of a GDS booking. A customer that books at AA.com is not incurring a GDS booking fee, but they will share in paying the cost of a booking by another customer that might make thier travel arrangements through American Express Travel. ITA can offer full flight selections without the same charge as Sabre, so what is problem with AA’s actions? As a consumer, I would like to see all fares in a given market and I will pay extra for a prime seat and good inflight service, but I will not pay a middleman for the privilege of making a booking just because they have a monopoly on the market which is a left over effect from the 1970s. If we had the Internet in the 1970s, we would not have a GDS market today. As a traveler in Washington, DC, I try to always fly United/Continental and sometimes I need to pay for an upgrade, but a GDS cannot handle the transaction so I book with United.com. But, if I worked for a large corporation, the corporate travel agency would not be able to offer the same upgrade due to GDS limitations. I want United/Continental to put every dollar into new aircraft and upgrading their facilities. I do not want them subsidizing Sabre, or any other outdated mainframe search engine, which is what a GDS is.
1. The cost to the customer is not going to change much. It is the cost to the airline that will change. AA is expecting the rest of the airline distribution system to modify itself so that it can deal with AA.
2. Direct connect strives to create a direct channel between the flyer and AA. Just like when a passenger goes directly to AA or as you say you go to United. Their screens eliminate all comparisons.
3. Yes. You can go to ITA as the system is currently set up and make across the board comparisons. You can go to Kayak. You can go to Priceline. But the ultimate goal is to shift away from the commoditization of AA’s seats on their planes. And that means the need for less transparency and more difficult comparisons.
4. The airlines are still not releasing fees. Go to AA.com today and look for fees. They are still almost impossible to find even though AA is promising them. We’re waiting.
5. Even though you may not know it, you pay a middle man every time you buy a loaf of bread, a TV set, a new bed or a new car. Somewhere in that purchase cycle is transportation by truck that normally goes to a middle man or a sales commission to salesmen. Those are all middle man costs. The airline industry is the same. There will always be middle man costs. The argument now is about how the costs will be divided in the distribution model.
6. GDSs can handle virtually any transaction. Most airlines turn to GDSs to solve their IT problems. The problem is that in the case of the United upgrade payment, United will not allow the GDSs to make that transaction or provide them with costs.