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Cold War between Travel Aggregators and Airlines Heats Up

15 Jun, 2015

By: Tracey Schelmetic

The ongoing cold war between travel aggregators such as Orbitz, Expedia and Travelocity is warming a little more as airlines look for ways to pull customers off of third-party travel sites and tempt them onto their own Web sites, where the costs are lower for them and the opportunities to cross-sell and upsell perks like more leg room and early boarding are riper. Airlines today are generally about getting customers to pay fees to them, and they’re not nearly as keen about paying fees out, which is a necessary evil for any airline that hopes to sell more seats through these popular Web sites as well as traditional travel agencies.

American Airlines has had an ongoing war for years with many of these sites. Some airlines, mostly notably Southwest, simply choose not to list their fares with third-party travel aggregators. Others, such as Delta, have begun selectively pulling some of their fares from the travel Web sites. Still more, aware of how popular the Web sites are, are attempting to woo customers from the sites to their own Web sites with the offer of bonus air miles, for example, upon booking, or a promotional discount.

While Delta made headlines last month with its limitation of flights that will appear on third-party listing Web sites, it’s now German airline Lufthansa’s turn to rebel, this time in much starker turns. The airline, which also owns Austrian, Brussels, and SWISS, will begin adding an $18 booking fee to all airfares purchased anywhere but its own Web site. While customers may still use the third-party sites to search for fares and flight times, chances are that most aren’t loyal enough customers to spend an unnecessary $18 and will move to Luffthansa.com to make their actual booking.

It’s a bold move, and travel industry analysts are curious about how the third-party travel will react, and whether other airlines might follow, according to George Hobica, a syndicated travel journalist and founder of Airfarewatchdog.com writing for the Huffington Post.

“How will Expedia, Priceline and other online travel agencies and meta search sites react?” asked Hobica. “Will we see them pull Lufthansa's fares from their search engines, as has happened in past tussles between, for example, American and Orbitz? Will they start charging a fee of their own for each airfare search to make up for lost revenue? If they do, it will make airfare comparison-shopping harder and potentially more expensive than ever, especially if other airlines copy Lufthansa's move, which seems likely.”

History, however, suggests that popular and successful businesses such as Travelocity, Orbitz, Hotels.com and Expedia will not go down without a fight, and their influence in the competitive world of travel shouldn’t be underestimated. As Hobic noted, “It's going to be an interesting autumn in the ever-changing world of airfares.”

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