Are Delta and other airlines driving customers to their own websites by blocking third-party access to fares and schedules? (Image: Delta)
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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I miss travel agents says
May 23, 2015 at 10:48 amI generally use those sites to see what flights exist for the route and times I want to fly, not so much to compare prices. Then I go to the airline’s website to book the ticket, so the airline benefits. I usually use Kayak and then check Southwest as well, since they don’t participate. I would love to know if there is a website that shows which airlines fly specific routes (including stops, i.e. direct but not necessarily non-stop), and for both domestic and international routes. And if the flights only go on specific days of the week or seasonally, that information should be included. And not to get greedy, but also showing whether the airlines are part of SkyTeam, Star Alliance, etc would be nice too. Being able to find that information quickly would be a win for the airlines and for customers. Does anyone know of such a website?
Erik Gustafson says
May 23, 2015 at 5:38 amYou started to hit my point. I always search for flights on Kayak, so if Delta (or any airline) doesn’t include their data, they won’t be getting my business.
Dan Leifker says
May 21, 2015 at 8:37 amBut by this logic, retail businesses should not be allowed to have individual stores, because making customers visit different stores impairs price transparency and makes comparison shopping difficult.
I’m shaking my head in disbelief at this absurd study. Consumers can sit on a sofa at 3:00am in pajamas and effortlessly do comparison shopping on the Web among different airlines… and now someone says it’s unfair if the consumer has to go to all the work of visiting three or four web sites?
Sounds like someone is losing money in a changing market and needs a pseudo-academic study to prop up their argument that they should not lose money. If you want one-stop shopping for airline tickets, let’s just force all the airlines to sell 100% of their seats on Craigslist.
Tony A. says
May 21, 2015 at 8:12 amI hope you understand that the “study” was paid for by a DC lobbyist (a revolving door Congressional aide turned lobbyist) representing OTAs. I believe the Yale professor works for a consulting firm that was paid to do this study.
Sure, some of the airlines removed some OTAs from selling their fares and prohibited meta-searches from displaying their inventory. You can always figure out another way to get base fare information airlines file with ATPCO and you can even say that it is public tariff information; but airline seat inventory availability information is not public info. Since you need BOTH of these info to get ticket prices, then you are out of luck if the airline does not want you to have its seat availability info.
There is no law requiring an airline to appoint any OTA as an agent or a law requiring an airline to provide meta-search companies like Kayak or Hipmunk with data as far as I know. The airline has a right to decide how it distributes its tickets. Southwest is one good example.
Salvatore Johnson says
May 21, 2015 at 6:32 amAgain this is all of Washington’s fault for allowing consolidation of the airlines. There is no more competition and now we have these really big companies that have to make massive profits. They are now like the banking industry too big to kill off.
If Washington wouldn’t of allowed all of these mergers, of course you would of had problems with airlines going out of business like Eastern and Pan Am, but the nature of America business would of seen other airlines pop up and take care of their load. So a United goes out of business is a short term problem until someone, and you know that others would of followed takes up the slack.
Now we are stuck with Delta, United and America being too big and we are all paying for it as they are able to charge whatever they please, do whatever they please and give us a really crappy product.
I write this all the time but management at Travel Skills are deaf on this being a big problem.
The airlines are just way too big and can now do whatever they please. So we should just sit back and enjoy being charge a lot of money for a terrible, uncomfortable experience.
tomg63 says
May 20, 2015 at 5:10 pmI’ve noticed this on Delta a lot. Sometimes when searching Kayak and similar you can only see a few of the flights that actually exist. I’m not sure why this helps them, since it often makes other airlines appear cheaper.