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Battle Escalates Between Airlines and Online Agents
Ponca City writes "The Epoch Times reports that online travel booking giant Expedia has removed American Airlines from its travel website over disagreements with American's fee structure in the latest incident in an escalating battle between airlines and online travel agents. Although American gets roughly two-thirds of its revenues from third-party travel agents like Expedia, American has been looking for online agents to cut their fees as one way to lower fares — something that Expedia was not prepared to do. Expedia released a statement that American's action 'will result in higher costs and reduced transparency for consumers, making it difficult to compare ticket prices and options with offerings by other airlines,' while American urged customers to book directly on American's website for the lowest prices. Meanwhile Google is waiting in the wings with its recent proposal to purchase ITA Software, the developer of the Internet's leading technology to compare flights fares. 'Though 49 percent of travelers purchase travel online, it is still time consuming and slow to search for travel options online,' says a statement from Google, defending the ITA acquisition which is being opposed by Microsoft on anti-trust grounds. 'We plan to work with ITA to create a new, easier way for users to find better flight information online.'"
It's funny that this story comes out now, as I was just considering changing my sig to "Have a pleasant, comfortable flight - or fly American Airlines." I'm really considering starting a blog about how BAD american Airlines has become.
I just flew on American Friday night from Honolulu to Chicago; 45 minutes out of Hawaii, the captain turned the "Fasten Seats Belts" light back on - at the first excuse for a mild bump - and then left it on uninterrupted for the next 7.5+ HOURS - in smooth. clear air - all the way until we landed - 36 hours later, and my feet and ankles are STILL swollen. I had noticed on the way out that American seemed to have developed this policy of keeping everybody fastened in at all times, but the ride home confirmed that in spades. American CLEARLY has developed a policy to keep you seated at all times, your personal comfort and blood clots be damned. I also noticed that they've changed the "...and we suggest you keep your seat belt fastened while seated..." part of the stdrap.h to "...we REQUIRE you to keep your seat belt fastened while seated...". Fuck you, you're just cattle (who has already paid your money) at the other end of a toggle switch. And we have "federal regulations require you to obey us" on our side.
It's clear to me that they've changed the policy both as a convenience to the flight attendants and as a sop to their cowardly lawyers in case some passenger bumps their knee during a flight and decides to sue.
On they way out, it cost $25 per checked bag, and one, which was over 50lbs (52.7 to be exact), cost an ADDITIONAL $50 over that.
Of course, there's no free food anymore, but they'll SELL you a chicken sandwich for $10, or a can of Pringles for $4.50. What I found interesting was that they don't take cash anymore - just credit/debit cards - I guess that "...all debts, public and private..." printed on the money doesn't mean anything if you're an airline.
All in all, flying American recently is the worst (modulo TSA related fun, which is a different rant) in-air experience I've had in the last 35 years, and that includes the flight from Nairobi to London on Air India - which was about as bad as you would expect.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
Airlines long ago eliminated commissions for in-person travel agents because they had the market power and how were 1000's of mom and pop agents going to fight the airlines? Fearing dis-intermediation, the airlines continued to pay Expedia / Orbitz and the reservations systems such as Worldspan commission for deal flow but now the airlines have the market power with their own sites.
Its a hard dose of reality for the online sites, who don't offer much functionality above what you can get on Southwest.com. My mom is a travel agent- and while she is computer challenged she can run command line commands into Worldspan faster than I can login to Orbitz. I've never understood why someone would spend hours online finding a site when a travel agent can do it all for you for almost nothing. My mother selected 3 of the 4 hotels for my honeymoon, the other coming from the NY times travel section. Guess which one was the dump with paper thin walls and crappy beds?
To an extent it's true. If American Airlines no longer show up on comparison sites, I'd say it's very likely that it'll be harder to compare prices - the rest of their statement follows from that fact, but it somewhat hinges on the fact that people treat airline tickets as a commodity item (within a given route and class, obviously). If all you see is a price comparison, chances are you'll pick the cheapest and doesn't matter who gets you there. It's certainly the way I used to think, but having happened to do the same long haul run on a few different carriers this year I was quite surprised at the magnitude of difference in the experience. It's hard to succeed as the "more expensive but better service" airline if all people see are numbers. On the other hand, though, it's hard to succeed as the "expensive and crap" airline if all people see are numbers.
There are definite merits to Expedia's argument. Although the airlines have multiple reasons to dislike the comparison sites, and the published reason might sound reasonable (and even beneficial to the consumer), cutting out the middle man is only a good idea if the middle man isn't providing a beneficial service. In this case, greater access to information is the service, and I think we probably do want that to be available. By taking away the commissions, you take away the possibility for comparison right across the market.
Yeah, my mom can be a practical joker like that too ;)
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When I have to fly I try Southwest first, then Jet Blue. If I can get their on either of those I drive or I don't go.
If you are a "casual" traveler - i.e. you typically travel for personal reasons or at your own discretion - you're dead on. Southwest, JetBlue and Virgin America are inexpensive, comfortable and usually will get you where you need to go on time. These airplanes don't offer much in the way of perks or status programs (other than getting you a free flight now and then), but as a casual flyer that's not a big deal.
But if you fly fairly often (say, 50,000 miles a year or more) for work etc., then the traditional carriers start making a lot more sense - mainly because they do have multiple classes, perks programs etc. For example, United is a pretty terrible airline - more expensive, bad customer service in many cases, less nice cabins ... if I were a non-frequently flyer, I wouldn't touch them with a 10-foot pole. However, because I fly a lot on United and its code share partners, I get a lot of perks. Specifically, I know that if my schedule changes and I need to fly standby, I will be able to get on ahead of pretty much anybody else. Ditto for if my flight is cancelled and I need to be rebooked. It's also worth the extra money to me (especially since I'm not usually the one paying it) to know in advance I won't get a middle seat, will get to board first and not have them run out of overhead luggage space, occasionally get upgraded to first class, and so forth. American Airlines to me falls into that group of airlines I'd never look at as a casual flyer but would think strongly about as a business/frequent traveller.
So I think which airlines you look at should be based on your travel profile. I can almost analogize it to business class vs. consumer class Internet services - consumer class is cheaper and is good enough most of the time. If you have special needs or are a heavy user, paying more for the business service is the way to go.
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From one who spent 25+ years on hotel management in different places (USA, Mexico, Grand Cayman, Netherland Antilles, etc.) the "normal" commission earned by a bookie, be it a Wholesaler (Tour Operator), Retailer (Travel Agency) or Booking Engine, is 30%.
Some hotels limit that to 12-15% for certain markets in order to remain competitive, but generally, one third of the rack rate is the norm. That is why you should insist in getting a discount on rack rate, no matter how you book it. As we say in the industry, no one pays rack, except the foolish or desperate.
On the other hand, if your hotel shows less than 30% of Sales as GOP, you're doing something wrong...
Be very, very careful what you put into that head, because you will never, ever get it out. - Cardinal Wolsey
If airlines were so hurt by websites like Expedia, then you'd think they'd inform users that they could get better prices if they just went to the AA website. But every time I've tried finding a flight on Expedia, and then going and finding the same flight on AA, the price is outrageously high with AA. Really, I think it's like TV networks fighting netflix and Hulu (on TV boxes), the networks want to divide up the market and overcharge you for crap you don't want, and Netflix just makes it too convenient for people to get what they want at the lowest price. Same thing with Expedia, services like that need to stick around.