Talking Points On Airlines' Pointed Talk

Executives at Delta and United recently singled out online travel agencies for providing less value than other distributors, namely corporate travel management companies, and suggested that one day OTAs should pay for access to fares and inventory. Asked to respond, officials with Expedia and Travelocity chose their words carefully and an Orbitz spokesman referred me to the Interactive Travel Services Association trade group [more], which has not responded to my April 22 email (spam/junk filter I'm sure!) or two voicemails left this week. (Phone problems? I do use Verizon after all.) ITSA did comment on its agenda in an April 24 Travel Weekly article.

[UPDATE: ITSA executive director Art Sackler provided his views in an interview with The Beat, published May 5. Turns out he was moving office. In short, he said what the airlines are contemplating is "substantially larger" than the distribution cuts they have implemented before. "The notion of reversing the system of commissions is truly alarming," he said.]

According to an Expedia spokeswoman, "Expedia is proud of the value we bring to our airline partners. We efficiently reach a significant and incremental volume of consumers through channels and programs that are complementary to airlines' own demand generation strategies. In an increasingly complex air product landscape, Expedia is committed to helping our airline partners sell their products and drive incremental revenue, supporting their desire to run sustainably profitable businesses."

According to a Travelocity official, "Based on our current discussions with airline partners, we believe they know the value we provide and the investments we make in marketing to bring them customers, and in customer care to provide a good experience for the customers."

ITSA executive director Art Sackler told Travel Weekly that the airline comments were "unfortunate" and "should flash 'danger' to the entire travel community. They're an early warning of what airlines could do if granted the broad antitrust immunity they are seeking in the oneworld and Star Alliance proceedings currently before the Department of Transportation. Reversing commissions, as the CEOs of American and Delta aspire, would risk disrupting this efficient system, driving consumer traffic to airline sites and away from distribution channels that display the wide variety of options available and stimulate competition and better pricing."

Meanwhile, a Travolution headline on Monday asked, "Do airlines no longer see the point of the GDS?" How off-point. A) It is the OTAs which the airlines mainly attacked. B) Who pays for the technology is a decidedly different question from whether it has value. I'm pretty sure airlines understand what global distribution systems do.