What American's Battle With Travel Sites Means for Consumers

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Planning to book your next flight on Expedia or Orbitz? If so, you won't be flying American Airlines.

American's flights have vanished from the websites as the cost-conscious airline seeks to reduce or eliminate the fees it pays these online travel agencies. Expedia and Orbitz, meanwhile, are refusing to adopt "Direct Connect" technology American has developed to sell customers personalized tickets with a la carte services like priority boarding or extra legroom. Delta, embroiled in a similar dispute, pulled its flights from three smaller travel websites in December.

American's "Direct Connect" would essentially cut out the middlemen that store fares from hundreds of airlines in databases and share this information with agencies. One such middleman, Sabre, announced on Wednesday that it will increase the fees it charges American, in a further eruption of tensions.

Industry observers expect the parties to resolve the dispute--though perhaps not the underlying issues driving a wedge between airlines and their intermediaries--soon. How will the standoff affect air travelers?

  • Online Travel Sites May Be Endangered, notes Douglas McIntyre at 24/7 Wall St. "Orbitz and Expedia have such a large part of the air travel e-commerce industry, that American's ticket sales are bound to be hurt," he says. But while American may initially lose money, "if other carriers join it so that online air ticket purchases migrate to airline sites, Expedia will in trouble."
  • And That's Bad For Consumers, states Ernie Smith at ShortFormBlog: 

Is it possible that [Expedia and Orbitz] have been so successful at their mission that they've actually forced airlines to make their flights cheaper? Well, to test this theory, we looked online at American Airlines' site for travel deals ... from DC to Dublin (where we’re taking our girlfriend in the next few months). The average cost at a site like Orbitz was roughly $650 per person for a flight and hotel. The lowest price at AAvacations.com? $1260 per person. It'd be way harder to figure out that was an awful deal if we had to go to every airline to compare prices.

  • Booking Travel Online Could Be Harder, says Forrester Research analyst Henry Harteveldt, according to The New York Times. Travelers may need to "shop on Priceline, Travelocity and aa.com, or add a metasearch site like Kayak.com, Bing Travel or FareCompare," he explains. 
  • Relax, Travelers Have Plenty of Options, remarks industry analyst Darryl Jenkins, as quoted in USA Today: "There [are] so many places where you can compare and shop around, it's almost infinite. I think at the end of the day, airlines will win this one, and consumers won't be hurt one iota."
  • The Airlines' Perspective Is Important, argues Daniel Indiviglio at The Atlantic. Airlines want to cut costs, and they worry that travel sites stamp out differences between brands. Customers using travel websites, for example, might not distinguish Delta's quality of service from Spirit's, and might not learn about the services Delta offers for a fee. He continues:

The burden lies with these websites to find a way to show these big airlines a tangible benefit of staying around. That likely means eliminating the middle-man systems and providing a more robust search with results that detail fees. Let's hope they do, because ultimately consumers will benefit if the big airlines continue to try to compete with the discount airlines on price.

  • This Is A Fight for Your Search Results, declares Douglas Quinby at the travel research firm PhocusWright, though he notes that Google's proposed purchase of the airline data company ITA could change everything:

Today, when a consumer shops for airfares via a travel agency (online or off), the "shopping and faring" is handled by the intermediaries ... Airlines have little say in what gets displayed to travelers.

American wants to change this. In its model, the search query would be passed from the agency to its Direct Connect, and they would determine what flights and fares to display ... This is nothing less than a battle for control of airfare search results.

This article is from the archive of our partner The Wire.