American Airlines Versus the Online Reservation Sites

Many of us are familiar with airfare wars. But now we may become familiar with airline reservations wars. The most public part of this was done over the Christmas holidays between American Airlines and Orbitz, Expedia and Sabre Travel Network.

American Airlines fired Orbitz as one of their travel agencies and Expedia first buried American Airlines' fares then fired them as a client. Sabre Travel Network has buried American Airline's fares with the intention of firing them in August. American Airlines used to be Sabre Travel Network's parent company until 2000.

There's a big difference between airfare wars and reservations wars. In the first instant, we the flying public benefit. In the second, the intention is for the airlines to benefit even more at our expense than they already have from nickel and diming us with all the add-on fees they've tried to connect to our tickets.

According to Joe Brancatelli and Expedia, American Airlines wants to gain more control over how their airline seats are distributed. They also want to limit what the flying public knows and when we know it so that they can control how much we pay for the final product.

In other words, according to Travelport, who owns 48% of Orbitz, and according to Expedia, American Airlines wants to make it more difficult for us to compare prices between the airlines. They want to make it so that we are required to individually go through the on-line travel agencies, to American Airlines, to get our tickets instead of going to the same travel agencies and comparison shop among all of the airlines.

Joe Brancatelli also writes that the airlines have discovered that they can go outside the confines of what is included in the tickets that are sold, when they started selling their services individually. So, they have decided to do the same in how the tickets are sold. That way, they can cut their costs and increase their income.

They, also, don't want to help make it easier for the passengers to prepay some of the add-on fees through the agencies because it means that they would have to share that with the on-line travel sites. They had discovered that by unbundling the ticket fees they don't have to share all of their income with the airports anymore. So now, they want to do the same with the on-line ticket agents.

The airline claims that it would increase the quality of our reservation. What I see is that it would add to the price of our ticket, because every individual service that is added to our itinerary would add to the price of our ticket just as each added meal, drink, bag and seat reservation can add to our ticket price.

The CEO of Amadeus, David Jones indicates that American Airlines' argument for the direct connect model doesn't make sense because they have "had a direct-connect agreement" with Orbitz "for years."

Both Joe Brancatelli and David Jones suggest that American Airlines is maneuvering to get the on-line travel agencies to renegotiate contracts at a much more favorable deal for the airline. This would mean, of course, that whatever they may gain we will end up paying for in some way.

In the next year we will most likely see if American Airlines is successful. We will also see how many more airlines decide to come-on-board with American Airlines, especially, since Delta started this action before Christmas by firing OneTravel.com, CheapOAir.com, and Bookit.com.

I don't know if complaining, about this, will work much in the short term, since this really doesn't cover a safety or decency issue. Flying isn't a right. It's a privilege. But it does appear to me that, in the long term, the regulations will need to be changed to limit just how far the airlines can go, just as there were laws passed against monopolies.

It seems that the airlines are doing the same thing that the companies did before the laws on monopolies went into effect. They're trying to cut out competition with this latest maneuver along with all of the consolidations that just took place. It appears that they just want to make as much money as they can without actual regard about whether it benefits the passenger.

Sources:

http://www.management.travel/American-Airlines-Orbitz-Worldwide.2010110401

http://www.businesstravelnews.com/Business-Travel/Travel-Management/Articles/Sabre-Moves-Against-American-Airlines

http://en.wikipedia.org/wiki/Sabre_Travel_Network

http://www.portfolio.com/business-travel/2011/01/05/why-legacy-airlines-are-warring-with-expedia-and-orbitz#

http://www.thebeat.travel/blog/node/3103

http://www.management.travel/news.php?cid=American-Airlines-Travelport-air-distribution-AA.Nov-10.18