The Travel Technology Association (TTA), a group that represents online travel agencies and airfare metasearch sites, has issued a scathing report charging major airlines with blocking some of its members from access to fare and schedule information, a practice that the group said prevents comparison shopping and costs consumers billions of dollars.
The group’s report said Delta has been especially active in this area, ending its relationships with 21 online travel agencies in 2010-2011, then in 2014 cutting off its data to metasearch sites (which aggregate data from a large number of airline and online travel agency sites) TripAdvisor, Fly.com, Hipmunk and Routehappy. It said other airlines have also restricted access to their schedule and price information, all in an effort to drive consumers directly to their own websites instead of comparison shopping through the affected sites.
As fares have gone up due to airline industry consolidation, the ability to compare fares and fees becomes more important for consumers, the group argued.
“This combination of airline concentration with heightened attempts to lead travelers away from OTAs and metasearch travel sites is likely to lead to higher average airfares, increase consumers’ search costs, make entry into city-pair routes by smaller airlines more difficult, reduce transparency, and strengthen the market power of the major airlines,” TTA said.
It said that as a result of the American-US Airways merger, “in certain city-pair markets in which the merger reduced the number of significant competitors from 3 to 2, or from 2 to 1, fare increases have been 7 to 17 percent. The welfare-enhancing impacts of broad access to airline fare and schedule information may be even larger in duopoly or monopoly city pairs.”
The group estimated that lack of consumer access to fare and schedule data could mean an increase of up to 11 percent in ticket prices, so that “223 million American leisure and unmanaged business travelers would pay $6.7 billion more in airfares, and it may result in up to 41 million passengers annually choosing not to fly because of higher ticket prices.”
You can see the full report here. It was compiled for the group by Dr. Fiona Scott Morton, an economics professor at Yale who formerly headed up the economic analysis office at the Justice Department’s Antitrust Division.
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