American Airlines has pulled fares from Orbitz (again) and will also pull US Airways’ fares starting on September 01, 2015. Though AA is a partial owner of Orbitz, the carrier and the online travel agency have been unable to agree on a fee arrangement for selling AA/US flights. History makes me hopeful this blockage is temporary in nature, but is nevertheless detrimental to consumers. Which side is to blame for this latest squabble?
Here’s American’s rationale:
American Airlines fares are no longer available through consumer websites powered by Orbitz, including orbitz.com and cheaptickets.com. We also anticipate removing US Airways fares from Orbitz on September 1, 2014. You can continue to compare and purchase American Airlines and US Airways flights or fares through other online and brick and mortar travel agencies. Corporate clients that use Orbitz for Business to book travel are not affected by this change.
Tickets already purchased through Orbitz websites remain valid for travel, but changes to reservations must be made through each airline’s reservations department. If changes to travel are needed, please contact the reservations center for the carrier operating the flight…
AA also offers some FAQs including this one:
Are there additional incentives for booking travel directly with American or US Airways?
American Airlines and US Airways flights are offered at the lowest available fares on each airline’s website at aa.com and usairways.com and you will pay no online booking fees. Only on these sites will you find convenient booking, online check-in, flight status notifications, the ability to earn AAdvantage® miles or Dividend Miles® on flights, hotels, cars and more – providing an all-in-one experience from booking to takeoff.
It is telling what “additional incentives” are not noted here.
The conventional travel agency has been driven to near extinction over the last 15 years as the online revolution as pushed nearly all consumers to purchase airline tickets themselves online. Mega online travel agencies like Expedia, Travelocity, and Orbitz were formed to allow consumers to search prices across multiple airlines between two city pairs and offer bundled hotel, car, and accommodations purchases along with airfare.
As technology has become more advanced, however, airlines (with Southwest and AA leading the charge) have been more reluctant to sell tickets through online travel agencies because of the increasing ability to 1.) custom tailor airfare search results based on the person searching and 2.) sell bundled packages that are either impossible or more much difficult to offer on a site like Orbitz.
For example, with AA you can pay for premium seating, priority boarding, baggage, and extra miles all at the point of purchase on aa.com – that additional ancillary revenue brings in big bucks each year and the airline doesn’t have to pay out anything, even a token amount, to a third party site for selling the ticket.
Thus, it comes as no surprise that AA is playing hardball with Orbitz because each day it makes less financial sense to market through Orbitz when AA.com has the possibility to generate much more revenue.
No more AA on Orbitz!
But for the consumer, this news is bad. Certainly, Kayak, Expedia, and Travelocity (and even Orbitz for Business) still offer AA and US Airways flights, but Orbitz is the easiest of the online travel agencies to use, in my opinion, and best for searching multi-segment itineraries and tickets that include more than one operating carrier.
Further, while AA allows a complimentary one-day hold on revenue tickets, it does not have a free 24hr cancellation period after booking. With Orbitz, you have at least 24 hours to cancel (in some cases more) and that offers some a more preferential security when booking a non-refundable ticket.
Who is to blame?
We don’t know. Anti-climatic I know, but neither side has offered specifics and it is not clear whether the two sides are close to agreement or far from consensus. Last time it was a court order that mandated the two sides play nice and this matter may work itself to court again.
But the effects of the increasing attractiveness of selling airfare only through channels you have full control over will continue to rear its head. Technology will eventually catch up to the online travel agencies as well, but in the meantime note that the bickering between Orbitz and American is merely a symptom of the new era in the sale of airfare in which shopping for a deal becomes harder and in which carriers, flush with publicity through social media and web advertising, no longer need any assistance in selling tickets.
Rocky offers his perspective as well.