Okay, enough about pigskin playoffs.
We said last week we wanted to know more about the reason American removed a portion of its available inventory from Expedia.
It appears we now have an answer. Kind of, sort of. If you dig through the reasons given by both sides, I think it comes down to one thing — the airlines are going to let the third party sites continue to sell the bottom bucket fares, but they want the chance to directly interact with their higher fare customers. Hence — it would appear that American is just the first in what will probably become a much longer line.
According to The Beat newsletter Friday,
“Expedia’s decision to “cease processing American Airlines bookings using the Worldspan global distribution system” is what led to the termination of domestic premium class and international fare processing on AA by Expedia as of Monday Jan. 8, according to an Expedia.com spokesperson.
“AA has made additional statements in the press that refer to negotiations between Expedia and AA,” the official wrote in an email. “Expedia made this decision independent of any negotiation issues with AA. We do not see the need to comment further at this time.”
The IAG blog noted today,
“Bottom line? Airlines are continuing to take back their product distribution. Last wee we wrote about how Alaska Airlines is thrilled with their own web site’s success. The news from Alaska is certainly not unique. Every ticket bought through an OTA (online travel agent) incurs a fee for processing which you only see when you are about to make the purchase. This fee even shows up separately on the credit card statement. Consumers are using the online tools available to find the lowest fare and then go to the airline’s web site to make the purchase and save $5 per ticket.
The Internet is the shopping place for bottom fishing, and the lowest fare buckets sell first. That is why American can safely exclude its premium products from OTA sites. We expect to see the same action with other sites (maybe even Travelocity?). Other airlines are bound to follow American’s lead. The Internet disintermediates any function that becomes unnecessary. And as matters stand, airlines do better selling their premium products than OTA sites.”
Ticker: AMR:NYSE