Yesterday, American Airlines announced that it was thanking its customers for their continued loyalty to the airline. It was a fairly predictable move, following the airline’s decision to pull out of Orbitz … which was followed quickly by Expedia’s making it more difficult to find American Airlines fares.
At the same time, the company engaged in a bit of chest-thumping – again, expected in this environment – claiming that overall ticket sales are up year over year since December 21, 2010, when it yanked its flights from Orbitz. Two days later, according to the statement, Expedia.com began discriminating against American’s flights and schedules by listing them lower in the search display than those of other airlines.”
“Our results to date show that consumer choice is alive and well and that our customers continue to have thousands of options to purchase American’s competitive fares and convenient schedules,” said Derek DeCross, American’s Vice President and General Sales Manager. “It is also clear to us that other online travel sites and traditional travel agencies are capitalizing on this market opportunity to gain business. Beyond that, we want to thank our customers and travel partners for their continued loyalty and support. We appreciate your business.”The airline says it’s committed to a wide range of distribution channels, as DeCross added, “Traditionally, airline products have consisted of different flavors of airfares. In the future, however, we envision the world of travel evolving into a much wider variety of products and services beyond fares. Our direct connection will help travel agencies help their own customers by giving them access to customized choices and delivering the best value to travelers. We do not envision a future in which we only sell to our customers through our own branded website. Our goal is to have broad distribution channels and choices for our customers, with our products and services delivered efficiently and without unnecessary costs flowing through the process.”
Okay, so that’s one side of the story. Fortunately, the Business Travel Coalition has weighed in with some comic relief another perspective. In a dramatic statement, written in a style I’ve only seen offered seriously by the Korea Central News Agency, the coalition says, “American Airlines’ (AA) press release distributed this afternoon [referring to December 29, 2010] regarding increased bookings since it pulled its fares out of Orbitz, and had its fares presentation downgraded in Expedia, has a hole in it large enough to fly an Airbus 380 through.”
According to the Business Travel Coalition, the bump in sales is attributed to the fact that American Airlines emailed a special offer to Orbitz customers that included a 20 percent discount on fares purchased before the end of the year on aa.com – which, if nothing else, is a savvy marketing move. Expedia customers received a 15 percent discount with the same timeframe.
Of course, the statement ratchets up the intensity a bit, saying these “targeted sales initiatives [were] instituted just after the combatants’ actions were taken.” Gotta love it: “combatants.”
In fairness, I characterized the struggle using war imagery as far back as December 6, 2010, when it was clear that a significant struggle between the airlines and online travel agencies was brewing.
So, the Business Travel Coalition continues, “In such a price-sensitive environment for consumers, discounts of this magnitude no doubt increased AA’s bookings likely masking the true negative impact of its actions and business predicament. Indeed, these discounts represent the price AA now has to pay to maintain market share.”
And now it’s time for the reality check: everybody’s posturing. And, it’s obvious. American is eager to show that it made the right move in a contentious marketplace that’s only going to become more so. The Business Travel Coalition has made its near-term mission the push for American to return to the online travel agency fold in a manner consistent with the rest of the industry. Both sides want to show that they’re right, and we get to watch.