After years of ceding the upper hand in online travel to booking sites like Kayak and Orbitz, American Airlines is about to fight back. According to the CEO of a competing travel site, American Airlines is about to pull its airline listings out of Kayak and is considering doing the same with Orbitz. If it does so, other airlines such as Continental and Northwest may follow suit.
Airlines don’t like the booking sites because they have to pay them a referral fee for every ticket they sell, as opposed to capturing the full fare when travelers book on their individual sites. Even though that only amounts to a few dollars per ticket, every dollar counts to the troubled airlines—especially now with fuel prices going sky-high and the consumer spending going down.
American Airlines has a particular beef with Kayak because it tends to show AA flights through its partnership with Orbitz instead of directly from American. That means American has to pay a double tax, once to Kayak and once to Orbitz. (The deal between Kayak and Orbitz, charges the competing CEO, was meant to drive up traffic numbers on Kayak as it was potentially seeking an IPO prior to raising $200 million instead last December).
The decision to sever ties with Kayak supposedly has already been made. The only question is whether Orbitz can salvage its relationship with the airline. This should strengthen competing travel sites, especially newer ones that link directly to the airlines like Mobissimo and Yapta.
Who was the competing CEO of the which travel site?
Thanks
Was it a CEO? Per CVOS Man, could it be that Kayak is trying to keep their high affiliate commission not really the consumer play?
Sorry mate, don’t ask me I don’t work ere. I just wanted clarification of the HP source. It’s good for the ole circulation see, noat ar meen..?!
Travelzoo.
http://www.youtube.com/watch?v=z3vTqmq_quc
The other airlines are finally realizing that Southwest is kicking their asses by only offering flights on their own site and not paying out stupid commissions.
Southwest is doing well because they are a better run business that locked in fuel prices when oil was under $80 a barrel. I never think to fly them though because they don’t list results in Kayak or any other travel search engine. I have yet to fly on Southwest as a result. That is poor in my opinion. If American pulls out Kayak, I won’t ever think to go to their site to search either. Long live Frontier Airlines (my fave).
My experience has been exactly the opposite.
I do a search on Kayak and others, then assume, mostly correctly, that the direct price from the non-listed budget airlines, mainly Southwest, is cheaper.
And the service on board Southwest is on pair with the full service ones, which is why it is the thinking woman’s choice.
Orbitz develops, maintains and hosts AA.com. Not that they hold their site hostage or anything, but there’s a pretty good relationship there.
This article is BS. mobissimo and yapta are meta-search sites, they don’t have direct access to GDS systems.
At Kayak.com, we are dedicated to providing a comprehensive and objective display to our users. We’re unwilling to amend this pro-consumer philosophy that is the core of our business by suppressing results based on a partner’s request. We welcome American Airlines to rejoin Kayak.com’s objective results at any time.
Translated: We get a much higher affiliate commission using orbitz than linking directly to AA.
Translated: American asked us to suppress search results from competing websites as a condition to displaying their fares. This is simply not something that Kayak will do. Imagine Sony telling Best Buy that they couldn’t sell Panasonic?
Translated: Kayak just kicked out all smaller online travel websites such as Cheapoair and Vayama and currently displays results only by Orbitz and Cheaptickets (owned by Orbitz). As a result most international prices are $100 to $500 higher than mobissimo. Now that is indeed great for the customer. And kayak most definitely did not allow Orbitz to pressure it into getting rid of the smaller websites. Not to mention that Kayak does not allow any new online travel agencies to appear in the organic search results to and from the US because of an exclusivity agreement with Orbitz.
“Imagine Sony telling Best Buy that they couldn’t sell Panasonic?” Huh??? Isn’t this more like Sony telling an eBay or an Amazon to not show Sony’s from certain Store/Partner X? But to only sell Sony’s from sony.com?
IMHO, its definitely a distribution power play. Economically, traditional eMiddlemen like Expedia/Travelocity/Orbitz charge much higher fees to both airlines and consumers (net lower revenue for airlines). Meta search sites that bypass traditional GDS’s probably cost less to airlines. But, they don’t want them to “grow up” and become the next Expedia/Travelocity/Orbitz…
I like sidestep.com the best out of all of them.
That’s nice, but Kayak owns sidestep.
http://www.techcrunch.com/2007.....-sidestep/
Wow, AA has really been focusing on making travelers hate them. It’s like a planned, negative public relations campaign. Or what not to do list for how to win over travelers. Extra charges, dropping preferred search engines, removing (I believe it was AA?) movie sets on domestic flights etc.
I think that it was US Air that removed the video gear to save 500 pounds (and the fuel to carry those pounds) just recently.
I hope both AA and United just go out of business, the jets they use still smell like cigarettes!
Well it’s pretty obvious the competing CEO is Beatrice at Mobissimo, i doubt it will change anything at Kayak to much, since they can continue to pull in AA results from either Orbitz or the mulitple GDS sources they have access to
And at this economical climate it’s very doubtful AA would drop Orbitz
Yep, AA is definitely on my will-not-fly list and has been for some time. Terrible service, uncomfortable and extremely small seats.. first class really isn’t even that much better. Not to mention every flight I’ve ever flown with them has been delayed.
Jetblue and Virgin are really the only way to go. Although, for last minute travel, you definitely can’t beat Southwest’s prices.
Allegiant Airlines has the best model in the industry. YUP!
This sounds like a good deal to me. Less money paid to useless middlemen means cheaper tickets for the consumer.
Keep dreaming. 1. Kayak and the like provide a very valuable service. They save me a ton of time while providing clear objective information. Hardly a useless middleman. 2. When was the last time a company decided to give back money to a consumer?
They day I find a price direct from the carrier that beats what I can find on Lessno and Kayak on one of the major airlines is the day I pinch myself in disbelief.
This seems like a shortsighted effort on AA’s part to specifically penalize Kayak and I’d be shocked if other airlines followed suit. If anything, AA is penalizing themselves by cutting out a major distribution partner and benefiting AA’s competitors.
As for Southwest, I think their success is due largely to superior customer service and a big bet they made on buying fuel at a lower price a few years back.
Couldn’t agree with you more. This is very shortsighted. AA is assuming consumers will take the time to go to their site and see if their fares/schedules compare. This makes way more work for the consumer, and knowing how lazy most of us are, I’m guessing that AA will lose a lot of online volume by doing this. Another example of a brand not thinking about consumer behavior, and just creating a strategy based on how they “want” the consumer to act. It’s 2008, hire someone that understands the interactive landscape already.
With regards to SW, yeah, customer service and ticket cost is what allows them to be successful (IMO)
Agree, Southwest has great customer service at a great rate!
This is ridiculous! I try to fly AA cuz I get the perks of being a platinum member, but the aa.com UI to search for flights SUCKS. Kayak works because it gives you the info you need to pick the best flight. I’ll pay an extra $10 to take American, but only if I can figure out which flight I need, which i can’t do on AA.com. Time to switch my travel to another airline when the one that makes sense for me to fly makes it harder to fly them!
Fax your plat membership info to a competing airline and they’re very likely going to match it.
Agreed. It’s a dangerous gamble AA is making.
I for one am glad this will happen. Kayak has a “pro-consumer” model but they still send the consumer to Expedia, Orbitz and Travelocity who charge the consumer booking fees and make it impossible to change your ticket. I guess the airlines aren’t paying them enough to keep out those sites. All the more reason to switch to using newer, better sites like Yapta and Mobissimo. I love using Yapta so I can watch prices before I buy.
I agree with you ‘frequent flyer’: in most cases, the best deal for the traveler is to buy the ticket directly from the airline’s website. If Kayak send you to Orbitz, then Kayak will get higher commission from Orbitz than from AA (I am guessing), so it is good for them. But not good for the consumer, as Orbitz will charge their service fee (from Orbitz website: “Service Fee: Each airline ticket purchased at Orbitz.com carries a non-refundable fee up to $11.99 USD.”). So, book directly with AA and you save yourself up to $11.99!
At http://www.whichbudget.com, we are very strong in Europe and still working on capturing the US market, but we managed to be strong by emphasising the fact that we will link you to the airline direct and will not take any commission (unless the airline offers us one) in the process.
Another reason I don’t fly AA - they suck anyway.
I would agree, AA service has gone down the tubes. Mis management is leading to there demise. Airlines like Virgin, Air Canada, And Air Berlin are opening up new US routes and service AA’s old customers. Wonder how they do it?
The way to increase sales and revenues is not to decrease your visibility. Has American Airlines proposed a plan to bolster their sales numbers through an in-house marketing initiative? If so, I’d love to hear about it. If not, they need to go back to the basics… http://www.readtheanswer.com/index.php?RTA=web2
Ron
Does anyone actually buy their tickets through a Kayak search? I just use it to compare what times and prices are available, then go to the airline’s site directly to save the booking fee and get FF miles. I’ve bought an American ticket many times this way… pretty stupid of American to lose potential customers by pulling out this way.
Um, but Kayak doesn’t charge you a booking fee, they link you directly to the AA website. You’ll pay the same price regardless.
You could be right Dave, however would be nice for verification from source.
But point taken with the other GDS possibilities, will effect their margins no doubt. Sure they will get some of their flights, they could always go to Arizona for the ones they miss..
Check out the new online travel room on the Friendfeed.
Checkout the reply feature, it is useful.
Cheers Frank, didn’t notice it before maybe its the @y@s! age etc, not used to all this small vague green title/font; may of thought was reply to main post etc.
It must be a complete nightmare for TC to sort, shift and sift through all their comments not to mention some real tech/data/crunching analysis. Bit of a challenge for the TC guys filtering the now nearly 1800 comments for the tablet project, I would most certainly relish getting involved with the pre-production project strategy discussion^><~
I Look forward to seeing what they do with the comments feature, would be handy if you tag the main post/your comment, and you get a feed back to your home town maybe FF etc in order to keep a butchers on the discussion.=.
Kayak.com has one of the worst advertising programs I have come across. I signed up to their site for several clients in the travel industry with substantial budgets allocated to PPC and PPM campaigns…since the Kayak network is supposed to be big I thought there wasn’t a better place to purchase ad space for the travel industry. Well…they ended up charging our account for clicks (that did not show up in our Analytics or their own reporting), it took two weeks to get an email from a representative - they steer clear of phone calls, and I have yet to receive a report on what exactly I was charged for. Crap network, crap customer service, crap interface for advertisers.
Aww, poor advertisers.
Great for consumers. Take off, eh?
Lateefx is absolutely right. Kayak.com is one of the worst flight search engines. You have to spend hours looking for the right fare because they advirtise a fare, and when you try to book it they change it to $3,000 higher. And God forbid, you need to make a change; you have a better chance to win the Lottery than to have a life himan being talk to you.
I agree with Dazza - I use Kayak for AA flights at least once a month and they always send me directly to the AA site. From using Kayak for hotels, I think that they send you to the best price for the specific thing you are looking at. So if orbitz has a better price for that specific AA flight, then they will send you to Orbitz. But if AA.com has a better price, you get sent to AA. So as long as the AA site is the cheapest place to buy the tickets… AA Platinum Member - Yes, completely agreed that AA’s UI is the worst! It’s practically impossible to compare flights. I would also pay the extra $10 to use kayak directly.
Expedia is my favorite of all of these. I hope the airlines don’t pull out of all of these third-party sites or it’ll be so much harder to find good deals.
If this happens, I think you can expect Compete.com to come out with one of their travel case studies.
@Uberz, I believe Frontier filed for bankruptcy. They don’t appear to be a model for success either.
I’ve been enjoying ITA Software’s web app for years now.
Yeah, I like ITA too. But they’re not always accurate. I sent an itinerary to my travel agent, ITA said total would be 350.50 and the travel agent said the total cost is 516.50 and I couldn’t find that rate anywhere, or any way to purchase the ticket??
I was puzzled.
Eh, like most everyone else on here I use these sites - Kayak, bookingbuddy.com, traveldealzone.com, etc. to find the flight I want then book it on the airline sites directly. But I do sometimes book my hotels through these guys.
http://www.youtube.com/watch?v=TrXibqx2FKw
I too. Smell a rat.
Just goes to show the airlines STILL don’t have a clue how consumers actually search for flights. When there are so many competing airlines on particular routes, most consumers really don’t have time to mess around trying to go through the confusing UI on each airline’s individual website, and will often go to aggregators like kayak to find out which airline is the cheapest/ flies at the best times etc. Whether or not they then buy from the airline’s website direct is irrelevant - if the airline isn’t featured on Kayak, it’s losing potential customers.
And then people wonder why these airlines are going bust…
talk about a decrease in sales, how do they expect to make up for all the lost sales that they get from sites like kayak and orbitz? people are lazy and it’s too much of a hassle for them to go direct.
American Airlines has consistently shown that they don’t care about the traveling public or their employees. Just another move by the current management to send the company into bankruptcy so they can void the union contracts. The current management has raided all the money they can raid and are now ready to destroy the company so they can walk away with their millions in cash.
You clearly have no idea what you’re ranting about.
This is certainly an interesting move both from AA and Kayak. However I think that Orbitz is the culprit to blame.
Mind it that since beginning of July, Kayak shows agency results only from Orbitz and its property Cheaptickets for both international travel and domestic travel. Same situation has been true for Yahoo Farechase and MSN Farecast for a while.
This hurts Kayak competitiveness as a metasearch and clears the road for competitors like Mobissimo.
It looks like Orbitz is trying to corner the metasearch market. What I can not comprehend is why a metasearch will agree on limiting its supply and service to its customers.
It is like Google refusing to index half of the internet universe for a fee.
http://www.lessno.com
Can you clarify how the Orbitz/Kayak deal “would drive up Kayak’s traffic numbers?” It looks like all the traffic in this arrangement would go from Kayak to Orbitz. How would this increase Kayak’s visitor numbers? Was Orbitz sending traffic back to Kayak?
I can understand why airlines are so suspicious of metasearch - price is hardly ever a big airline’s USP, no control etc - which is why we’re trying to do something a bit different with our flight search function on iloho.
I am wondering about this though: “This should strengthen competing travel sites, especially newer ones that link directly to the airlines like Mobissimo and Yapta.” Mobissimo, in my experience, does not link directly to airlines, but rather OTAs such as ebookers and edreams…
I find it funny that American Airlines may ditch Orbitz when the airline was one of the founders of the company. From Orbitz’s site:
Orbitz, Inc. was originally formed in 1999 by a group of leading U.S. airlines to participate in the rapidly growing online travel industry. The airline investors in Orbitz consisted of American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines and United Air Lines.
It is time for the airlines to keep distance from online travel sites or aggregators. Kayak seems OK, except for the fact that they give results from EXPEDIA, Orbitz and other OTAS. Expedia is a scam (click on my name to read my case that porves EXPEDIA is a scam).
Nowdays, Im using Kayak but I book directly with the airlines. So far, that seems to work better.
Kayak “rocks”. Given the current economic climate, they’ll be around long after AA is long gone!
It is begining of the end for meta search sites like Kayak ,SideStep ,Mobissimo
Http://asianairfares.com
I saw this coming!
I posted on the devious tactics of Kayak at http://cloud9ineteen.blogspot......eware.html a few months.
Airlines should stop open up access to their search through APIs - that would completely change the dynamics of the meta search market, and help the airlines a lot. I have a post on this on my blog: http://clickr.typepad.com/vija.....irlin.html
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Yesterday, AA flights were back on kayak, albeit without the link to orbitz.com right next to the aa.com linkoff. Also still missing are multi-carrier flights that include AA but are sold via Orbitz/CT - doubt these will be back anytime soon. Appears the spat is over.