Drea Knufken
Online travel agent Expedia is no longer listing American Airlines flights on its websites, thanks to American’s effort to cut travel agent costs. From the Wall St. Journal:
The removal of American flights from Expedia’s listings comes as a conflict between the airline and travel sites ratchets higher. On Dec. 21, American pulled its listings from Expedia competitor Orbitz Worldwide Inc. (OWW). The airline hopes to drive more traffic to its own website, which it says offers “our lowest airfares” and doesn’t charge an online booking fee.
American dropped Orbitz after failing to reach a new contract with that company. American is trying to encourage online sellers to link to the airline through a “direct connect” system, rather than through the global distribution systems that still dominate the airline ticket market. American wants to cut costs by trimming the fees it pays to the global distribution systems.
On Wednesday, AMR said its disputes with Expedia and Orbitz hadn’t hurt ticket sales over the previous week and that passengers were booking on its own website and external sellers such as Priceline.com and Kayak.
American, the third-largest U.S. airline, is at the forefront of an industry effort to reduce the cost of ticket sales that has brought it into confrontation with parts of the travel agent sector, as well as the online sellers.
Cutting costs related to travel agents is a much more consumer-friendly way for an airline to protect profits than some of the airlines’ other efforts, like charging $50 to check bags or cutting flight supply to a bare minimum in order to maximize fares. It’s almost a relief to see that they’re looking to other venues to trim down operating costs. As for Expedia, it may just be running on an agency model whose time is almost up.
