The government is already looking into the airline industry over the fees they charge. There is a push to make them more transparent. I think they’re pretty obvious, but maybe I’m a seasoned traveler. If they’re going to address that, they need to also look at something else the consumer can’t see. There is a lot of bargaining that’s happening behind closed doors that affects where consumers buy their airline tickets, and ultimately could impact the price you pay.
The American Society of Travel Agents is asking the Department of Transportation to look into the online travel industry and the fares and schedules the airlines provide. This comes after American Airlines flights disappeared from Expedia and Orbitz. American blames a commercial dispute with Expedia, and refers customers to Priceline, Kayak, American Airlines, and travel agencies.
As for Orbitz, American says on its website in a message to consumers that, We were unable to reach a mutually beneficial agreement with Orbitz that would provide customers with a full choice of American Airlines fares and schedules. As a result, Orbitz is no longer authorized to display our schedules or sell airline tickets for travel on American Airlines or American Eagle.”
The issue behind the scenes is over a “direct connect” system. This is how data is transmitted. Here’s American’s explanation to consumers, “A direct connect” model simply relates to how data is transmitted in back-end reservation systems and would be transparent to customers. American’s approach will allow travel agencies the freedom to communicate reservation data directly with the airline, in the same way that many agencies work with hotel and car rental companies today.”
This “direct connect” model is a bit related to the extra fees consumers are seeing, and American admits this. That admission may be how the DOT brings this up during its discussions over fee transparency.
American wrote, “travel choices are expanding beyond fares to include optional services like checked baggage, priority boarding, and preferred seating. Our direct connection will help customers by giving them access to customized choices and delivering the best value for their individual travel needs. Our goal is to have as broad a distribution as possible, creating choices for our customers in every channel, with our products and services delivered efficiently.”
If this becomes a serious problem and more airlines follow suit, consumers would either spend lots of time shopping on various sites for the best price or they’d just pick up the phone and have a travel agent do the work for them. So, it’s interesting that an organization representing travel agents is fighting for consumers. I guess we are all in this together, and they are impacted because this could change the whole ticketing system.
I just think it sounds odd at first because most people think these online sites killed travel agents. A few months ago while working on another story I asked a travel agent about her business. She told me the online booking has not killed her business. The weak organizations did not survive the online boom but the strong ones found a way to make it work in their business. She noted that some companies are no longer booking their own flights because it’s too much of a headache and it gives business travelers someone to call when they’re stuck at their airport due to a cancellation. Travel agents don’t like to admit it, but they use these online site comparisons, too.
ASTA admits it could be impacted as well, and that’s another reason they are making a statement. In response to American’s “direct connect” system, ASTA wrote, “This program is claimed to be necessary to enable the marketing objectives of American, but, based on the limited information available regarding the program, it threatens to produce expensive and complex “de-integration” of efficient information flows that have benefited consumers of air travel for decades.
Our efforts to obtain information about the program from American have largely been rebuffed. And, there is no tangible evidence that the claimed benefits of Direct Connect have been accepted by either customers or travel management companies.”
It should also be noted that in a separate move, Delta pulled its flights off smaller aggregating travel sites but it appears to be a different issue for now. According to the Atlanta Journal-Constitution, Delta wanted to increase the percentage of business on its own site. It also may decrease fees all around. The question is — will those savings be passed on to consumers?
- Sabre to pull American Airlines flights (bloombergnews.com)
- Codesharing and consolidation causes confusion for consumers (jennstrathman.com)
- Here’s The Real Story Behind The Battle Between American Airlines And Expedia (AMR, DAL, EXPE, PCLN, OWW, GOOG) (businessinsider.com)