Why You Won't Find American Airlines On Orbitz Or Expedia
A quick heads up if you're buying a plane ticket online this week: Orbitz and Expedia aren't listing any American Airlines flights right now.
It's the result of a fight between the airline and the online travel sites. The details reveal a lot about the economics of the industry, and where airlines want to take things.
American wants to cut out a layer of middle men, gather more information about who's buying tickets, and make a push to sell more extras -- onboard wi-fi, say, or more legroom.
The airline wants to cut out a group of companies called Global Distribution Systems. They take flight data from almost all major airlines, and pass it on to travel agents and online travel sites. They also take booking information from travel agents and and sites, and pass it back to the airlines.
An airline pays a GDS a couple bucks for every flight segment that it books. The airline also pays a fee to the travel agents or travel site that made the booking.
American has created its own system, called Direct Connect. The airline wants Expedia and Orbitz to use Direct Connect, rather than a GDS, for American flights.
That would, of course, mean that American wouldn't have to pay the GDS every time somebody books a ticket.
But there's also a broader, long-term strategy at work here, according to Douglas Quinby, senior director of research at a travel industry research firm called PhoCusWright.
American and other big, old-school airlines got hammered in the past decade by competition from low-cost carriers, among other factors. So to make money, they're relying more and more on fees for everything from checked baggage to onboard wi-fi, Quinby told me.
Getting direct access to passengers who are shopping for airfares would allow American to pitch those extra goodies in a targeted way -- the same way Amazon recommends products based on your previous purchases.
So, in American's ideal world, when you were shopping for fares on Orbitz, say, you'd see not only price and schedule info, but also targeted details about the other stuff you could buy as part of the flight.
"That’s the endgame of American and other airlines," Quinby said. "They're transforming themselves from suppliers of commodities to product marketers."