American Airlines and Orbitz tangle over fees and booking process

by Tom Johansmeyer on

Do you use Orbitz to book flights on American Airlines? Well, your online travel buying habits may have to change. American is getting tough with Orbitz – and other online travel agencies – about how they do business together. For now, you can keep buying tickets on American via Orbitz, but a change could come as early as December 1, 2010.

The rhetoric is already high, as you can see in a recent Bloomberg report. Barney Hartford, the CEO of Orbits, said, “This is a broad attack by American on the travel distribution landscape.” The airline wants the likes of Orbitz to pull flight and fare info directly, rather than through a global distribution system.

So, is this all saber-rattling, or are American’s threats to pull out of Orbitz real. Bloomberg reports:

American can’t afford to pull its content off all the global distribution systems, and its conflict with Orbitz is a “private negotiation that suddenly became public,” said Jay Sorensen, president of aviation consultant Ideaworks and a former marketing director at Midwest Airlines.

Sorensen said he doesn’t “see an agenda here for American to remake the travel industry.” He indicated that this is part of a prudent negotiating strategy but noted that Orbitz may call the carrier’s bluff.

There’s a lot at stake – hundreds of millions of dollars, in fact. American has paid nine-figure sums to companies like Sabre and Galileo to gain access to online travel agencies and wouldn’t mind bypassing them and saving a few bucks, it seems.

So, will negotiations turn into a game of “chicken” as the end of the month approaches? Let’s wait and see how this develops.

[Via USA Today, photo by Deanster1983 via Flickr]

The online travel market moves past pulling the trigger

by Tom Johansmeyer on

If you think you need to sell seats or rooms to be a player in the online travel industry, think again! Travel research firm PhoCusWright found in a new survey that the online travel marketplace has evolved over the past few years to include a wide selection of non-transactional travel sites that serve as “pointers” to those online destinations were eager travelers can melt some plastic. But, the publication of regular content — at sites like Gadling, for example — is where many travel buyers are forming their relationships, leading to the possibility that the strongest online travel brands may not have any selling capabilities (or interests in developing them) at all.

For companies in the business of selling travel online, this opens a new range of considerations, in which relationships with non-transactional content providers have to be managed carefully. After all, the seller wants to cultivate the customer’s loyalty but also wants to ensure a steady stream of traffic from complementary businesses. “Metasearch” sites, like Kayak, which scour several online travel sales sites, are also playing an increasingly important role in the online travel dynamic.

“Before consumers ever hit the ‘book now’ button, they undergo a whole process of gathering, qualifying and comparing travel options,” says Carroll Rheem, director, research at PhoCusWright. “Both metasearch and review sites are designed to help consumers in this often cumbersome decision-making process. Therefore, it is not surprising that the popularity of these types of Web sites has grown significantly over the past several years.”

As of the end of June this year, Kayak was the top met search site on the web, with close to 7 million monthly unique visitors. Rheem observes that Kayak is among “the most exciting brands in the travel space today.” She notes, “We wanted to take a closer look at which elements of their content and functionality consumers are gravitating toward and what impact they have on booking behavior.”

Markets tend to change during periods of upheaval, so look for the next few years to yield a completely different landscape online. The online travel agencies and other sellers will probably become spots for trigger-pullers only, with the relationship being owned further up the travel information supply chain. Travel buyers will form their relationships with sources of information, not sources of inventory.