The current fight between American Airlines and Orbitz Worldwide and Travelport by default has been well publicized. In a nutshell, after winning a hearing in court yesterday, AA canceled Orbitz' ability to sell tickets on the Orbitz family of websites including Orbitz.com, Cheaptickets.com and ebookers.com. The dispute revolves around how AA distributes inventory to Orbitz, both financially and technically.
To date, AA has been a lone wolf in this area with scant public support from any other airlines. Unlike in many other airline moves where one moves on Tuesday and the rest of the industry follows by Friday (think commission caps, bag fees, change fees etc) AA has stood alone.
In an amazing coincidence, Delta Air Lines (DL) yesterday announced that they would pull their inventory off of three smaller OTAs: cheapoair.com, onetravel.com and bookit.com.
Delta has made it clear that they value some distribution points more than others. These three websites generate a significant amount of traffic from meta and click-off search sites such as fly.com, bookingbuddy.com and tripadvisor.com - we can imagine that Delta probably tired of seeing these smaller, less relevant websites listed alongside Delta.com (and other, larger OTAs) as a booking option.
By flexing their distribution muscle and removing inventory from these sites, Delta is making a calculated move that they will be able to continue to sell the inventory currently sold through these websites elsewhere, and in particular, Delta.com.
We would bet doughnuts to dollars (just by the URL names alone) that the vast majority of tickets sold through these sites are low-yield tickets. As anyone in the airline business knows, airlines don't need help selling more $39 tickets to Orlando. There is nearly insatiable demand for low-fare tickets and consumers visit multiple websites in the hunt for these fares - Delta is banking that consumers will still find their low fares elsewhere, and hopefully that will be Delta.com.
And, if those same consumers don't visit Delta.com (or another OTA) there are plenty of other
consumers who will those same cheap fares - airlines can fill planes all day long with $39 fares without any
help from an OTA.
[more]These insights are excerpted with permission from Tom Botts' Hudson Crossing blog.