American Airlines touts Kayak, Priceline as favored online travel websites
The airline has notified online travel customers on the AA.com homepage that “Expedia and Orbitz no longer feature American Airlines’ fares.”
When you click on the provided link, American Airlines states: “Expedia has chosen to no longer feature American Airlines fares on its website. Customers looking to compare flights or fares online should visit other travel sites such as Kayak.com or Priceline.com for the most accurate and up-to-date information, or you can always find our Lowest Fares Guaranteed and No Online Booking Fee at AA.com. American flights can also be purchased from a wide range of accredited travel agencies across the globe.”
American Airlines yesterday pointed to Priceline and Kayak as booking alternatives in a statement, but has now highlighted these online travel alternatives on AA.com.
American Airlines’ mention of its fares being available on Priceline.com, in particular, comes amidst speculation that perhaps Priceline has broken from the ranks of Orbitz and Expedia and signed a direct-connect deal with American Airlines.
In a research note, Soleil Securities analyst Jake Fuller refers to reports that Priceline has signed a direct-connect deal with American Airlines.
Priceline couldn’t immediately be reached for comment about whether it has signed a direct-connect deal with American.
It is not believed that Kayak has such an arrangement with American, which is a key partner.
Kayak states it can’t discuss relationships with advertising and distribution partners.
Given the retribution leveled by Travelport and Expedia regarding American Airlines’ direct-connect strategy and removal of flight inventory from Orbitz, it would be understable if Priceline or travel management company signatories would be reluctant to publicize direct-connect contracts with American Airlines, if such agreements indeed are in place.
Notice that American Airlines mentions Priceline and Kayak as online travel sites offering American Airlines flights and there is no mention of Travelocity, which also currently offers American Airlines’ flights.
But, Travelocity, after all, is part of Sabre, which vehemently opposes the American Airlines direct-connect strategy.
In his research note, Fuller explains some of the OTAs’ economics behind their AA Direct Connect considerations.
Fuller says by cutting out GDS middlemen, American Airlines would save around $9 per ticket in GDS fees, and the OTAs would lose around $5 per ticket they collect from GDSs in the form of incentives.
Fuller estimates that GDS incentives account for about 5% of Expedia’s revenue and 15% of Orbitz revenue, so Orbitz faces much greater exposure to GDS bypass initiatives.
Meanwhile, Expedia’s showdown with American Airlines could heat up even further over the next week or so because the American Airlines-Expedia contract expires Dec. 31.
For now, American Airlines doesn’t appear on Expedia.com as a choice in the flight grid on the top of search results, but you can still book American Airlines flights — if you can find them way down in search results — on Expedia.com.
But that could change if there isn’t a renewal or extension of the American-Expedia contract.
The two sides were believed to be talking earlier this week — unitl Expedia abruptly de-preferenced American Airlines’ flights.
In another twist to the Travelport-Orbitz-Expedia-Sabre fight against American Airlines, the airline’s flights still remain available on Orbitz Worldwide’s CheapTickets website and some of OWW’s international points of sale. The grid shown below shows American Airlines’ flights on CheapTickets.
That’s because Orbitz had a Supplier Link agreement with American Airlines, which enabled Orbitz and Orbitz for Business to access airline tickets directly from American Airlines’ internal reservations system rather than through a GDS.
CheapTickets was apparently not part of this Supplier Link agreement. Orbitz signed such Supplier Link agreements with its founding airlines.
The economics involved in the Supplier Link agreements and the type of direct-connect technology in place are at the heart of the Orbitz-American Airlines’ dispute.
Dennis Schaal was North American editor for Tnooz.