cheapoair
1435 days ago
 

Delta cites Apple experience, exits CheapOair, BookIt.com, OneTravel

If the American Airlines decision to pull its flights off Orbitz has U.S. online travel agencies and global distribution systems shuddering, Delta Air Lines is sending a more subtle message.

It didn’t get much notice at the time, but Delta removed its flights Dec. 17 from second-tier — but still important — online travel agencies, CheapOair, BookIt.com and OneTravel.

Delta wants to drive more direct traffic to its website and to make a Delta.com visit a unique experience — sort of like the distinct shopping experience consumers get walking into an Apple store, one official said.

Delta, like American, also wants to reduce its distribution costs, and Delta’s pullout from the three OTA sites could be a negotiating ploy.

When asked about Delta’s withdrawal, Bill Miller, senior vice president of strategic partnerships for Travelong, which operates, CheapOair, said: “We’ve had a 10-plus-year partnership with Delta and we fully expect to renew our contract with Delta in 2011.  This is our only comment at this time.”

Several searches this morning for JFK to Atlanta Delta flights through CheapOair and OneTravel  turned up United Airlines, US Airways and American flights instead.  Here are CheapOAir search results from a Delta query. Notice the DL airline code at bottom left and United and US Airways featured in search results.

cheapoair

Unlike American, which pulled its flights off Orbitz, Delta hasn’t publicly proclaimed its intent to pursue a direct-connect strategy, although that can’t be ruled out as a future goal.

Instead, Delta is getting a tad more Southwest-like and explains its exit from the three smaller OTAs as a bid to drive more traffic to Delta.com.

Speaking at a Delta investor event Dec. 17, Glen Hauenstein, Delta’s executive vice president of network planning, revenue management and marketing, said the airline wants to drive more direct traffic to its website and will do so through enhancements, and offering loyalty currency and other exclusive website features.

“You are purchasing our product [and] the most robust experience you should have in that transaction should theoretically be our website,” Hauenstein said. “We look at it very much like an Apple store versus Best Buy. You can buy components or Apple products at both. Your experience in an Apple store is obviously quite different than it is at a Best Buy store. That model is what we think about when we think about Delta.com.”

The one thing that the Delta and American moves have in common is that both airlines are pushing to reduce distribution costs. Thus, Delta’s pullout from BookIt.com, CheapOair.com and OneTravel may give the airline leverage with the likes of Expedia, Travelocity, Orbitz and Priceline.

And, don’t underestimate the import of Delta’s decision to withdraw inventory from lesser-known OTAs — they own a piece of the pie.

CheapOair consistently ranks among the most-visited U.S. travel websites. In a recent tally, CheapOair ranked just behind Orbitz and Travelocity in percentage of visits at No. 6, and ahead of Hotwire, Kayak, Bing Travel and Cheap Tickets among the top 10.

 
 
Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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  1. Delta removes flights from CheapAir, Vegas.com, AirGorilla and Globester | Tnooz

    [...] airline, which last month removed its flights from CheapOAir, BookIt.com and OneTravel, did likewise late last week on CheapAir.com, Vegas.com, AirGorilla and [...]

     
  2. Tammy

    This is not about the consumer and the airlines wanting to interact with their customer. This is about reducing costs for distribution and positioning for the Google acquisition of ITA in the travel space. The airlines want its distributors of all kinds (OTA’s, bonafide travel agencies, etc.) to utilize a direct connect into their systems vs utilizing the global distribution systems (GDS). This has been a part of the big picture plan for years; the airlines have been verbal and visible in their design and intent to the travel agency community. Many agencies today (mine included) already search the Internet and go ‘direct’ to the airline for inventory. As an ‘insider’ this is not new to us, but is just now getting the exposure to the general public as the airlines battle with trying to disentangle themselves from the Internet travel site bohemoths that the airlines themselves created…with the original goal of reducing the value of the GDS’s and hoepfully their costs. The basic problem of the Internet travel sites model was the airlines and Internet travel sites used the GDS’s as the backbone for their search engines. Not smart…it only made the GDS’s more valuable and more profitable. The Internet travel sites never did achieve the goal of reducing the value of the GDS’s and therefore the costs of the airline expenses in GDS relationships. The GDS’s are the smart ones in this game. They have been developing technology for the past several years to prepare for this new distribution model. They are already deploying systems with features and functionality that will support direct connect and even connectivity to OTHER GDS’s. Google should acquire a GDS…

     
  3. Why the airline-online travel agency war will not evolve to hit hotels | Tnooz

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  4. BookIt.com CEO: Delta pullout part of fundamental distribution shift | Tnooz

    [...] Delta Air Line’s withdrawal of its schedules and fares from online travel agencies CheapOair, BookIt.com and OneTravel a couple of weeks ago may be part of a fundamental shift in the airline’s distribution strategy and just the opening round. [...]

     
  5. Clarence

    One thing missing here. CheapOAir, Bookit, used affiliates. Thousands of branded and co branded websites advertising on a commission only basis. DL will not be able to replace that.

    People don’t go directly to travel providers websites any more. If someone is looking for a destination “say a special event” they look first at the event’s website or a blog around the event. This is where affiliate partners advertise, and this drive traffic and conversions.

    Some of this affiliates also advertise on behalf of the affiliate partners in small niche markets un-noticed by the larger provider. many of these combined niche markets together make a huge amount of traffic and revenue.

    Every company wants to jump the gun, get out of the standard distribution channel and go directly to customer “and cut out the middle man and keep the cash for themselves”, but the middle men make it easier for the customer, and the provider.

     
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  8. vibhuk

    Cent percent in agreement with Joe and Robert…in today’s world as the consumers demand and shopping avenues are changing..customers are looking for an expereince, which is best commanded when you have a right mix of online and brick & mortar…another aspect that would further augument the fourth wave would be the mobile…with iTravel and a couple of more apps becoming popular/improving…the young mobile savvy travellers, esp business who travel point to point..would find lot of value in it…interesting to see how things will unfold.

    As far as AA and DL pulling out of the Travelport…according to my expereince..these are only muscle twisting tactics… they have been under negotiation for quiet some time to reduce the distribution cost…..in the real GLOBAL world they both need each other…maybe an in-between arrangement to run two business models- one dedicated for americas and the second for the rest of the world.

     
  9. RobertKCole

    I think Joe has gotten to the core of the issue – the web punishes intermediaries that don’t provide value.

    The first wave wiped out a lot of travel agents that simply served as order takers and did not provide much in the way of expertise. The only sad part was that some quality travel agents got wiped out as wel – not because they didn’t provide value, but because they could not adapt their business model to the new economic market realities.

    The second wave certainly looks like the same process will be repeated with the online intermediaries – especially where air is involved. The relative fragmentation of the hotel industry should keep the online pllayers fed, but perhaps not as richly.

    The third wave may be most interesting as then, I predict, hotel brands – that currently provide the lions share of OTA profit- may have their day of reckoning.

    One would think that with more efficient web distribution, will major hotel chains be aggressively challenged by hotel owners to justify the value of their distibution networks?

    Let’s see what the democratization of travel data brings. It would seem the ultimate travel supplier – the operator of the service – and consumer will be interacting more directly.

    The fourth wave? If Google, Facebook & Apple successfully penetrate the travel industry that fourth wave could get really interesting.

     
  10. Joe Buhler

    Agree with Timothy’s comment on this. Aside from the lame comparison with Apple, the DL and AA moves show that the very initial idea of the web as a threat to intermediaries seems to finally starts to impact more players in the travel industry than travel agents, the victims of the first wave. Suppliers with recognized brands, and let’s face it most major airlines no matter their quality of service are that, will likely continue to make moves to sell as much of their product directly to consumers eliminating intermediaries unless they are absolutely essential and add value to the transaction.

     
  11. John

    It is time the airlines take control of their distribution. Shut off the screen scraper(professional shoplifters)-Deal Direct own your distribution

     
  12. Josh Friedman

    Im just saying that delta might want to protect it’s brand experience by dumping partners who take away from that. It’s nice that cheapo is cheap and peovides a nice distressed outlet. Buy customers who are stranded at airports due to volcanos, snow storms or stupidity (I has clients book their four seasons Tahiti honeymoon air with cheapo n typed in the wrong name) need 24/7 assistance and if cheapo isn’t able to help – and they’re 0 for 2 – and if delta can’t help thru delta.com and theyre phones are overloaded then the passenger ends up with a negative impression of Delta n cheapo. Good for brick n mortar travel agents.

     
  13. Timothy O'Neil-Dunne

    There is a lesson here. The owners of content have the right to place that content where they like. Whether DL has a good experience or a bad one at Delta.com will be decided by the customer.

    Distribution is no longer a sure fire automatic right for anyone to sell content that they don’t own. if nothing the events of the past 6 weeks have shown – that is a fact.

    Anyone who takes ubiquity of content for granted is going to have to re-think that.

    But let me pose a different question. If the Alliances start to represent such a large proportion of traffic – then is it reasonable to assume that the single one-size fits everything model is no longer valid?

    Cheers

     
  14. Dennis Schaal

    Dennis Schaal

    Josh: Not sure what your objections are to the consumer experience, but CheapOair leverages its Travelong relationship and sometimes gets air deals that you won’t find on major competitors.

    Given its traffic, someone must be seeing some value in it.

     
  15. Josh Friedman

    The consumer experience is so bad at cheapoair, I’m told and witnessed, that Delta could have a real reason to want to shun them.

     
  16. surfpooch21@aol.com

    Lets not kid ourselves Delta… You are not a unique snowflake…You are a bus… you get people from one place to the other.

    Apple has a unique product(s) and has the clout to say how they want their product distributed.

     
  17. Flight Guy

    All this will do is drive more people to other airlines. They will restore their connections in a few months.

     
  18. Dennis Schaal

    Dennis Schaal

    Robert: Agreed…Delta has a way to go before really making Delta.com into a unique experience akin to Apple.

    Where did you get the Ferrari Santa?:)

     
  19. RobertKCole

    Love the Apple analogy.

    Obviously this means Delta intends to have an ample number of well-trained, personable staff available to consumers who are able to bend company rules at times to ensure customer satisfaction.

    That’s really cool.

    And if you believe that, you will really enjoy the new Ferrari Santa will be putting under the tree this year…

     
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