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BizReport : Ecommerce archives : May 06, 2013

Airlines outselling online travel agents

Times are changing for online travel agents. Once upon a time they had a 4-point lead in the U.S. over the number of travelers booking airline tickets via suppliers but, according to travel consultancy PhoCusWright, that is no more.

by Helen Leggatt

For the first time ever, more U.S. fliers are booking flights via airline websites than via online travel agencies (OTAs). A PhoCusWright survey found that, in 2012, 36% of travelers used a supplier website to book flights compared with 33% that went via an OTA.

Just a year earlier, OTAs had the lead, with 37% using them versus 34% buying direct.

Until a few years ago, airlines could steer travelers to their own sites instead of OTAs such as Expedia by offering fee-free bookings. That changed when OTAs also began dropping booking fees.

But, the war is again raging. Policy changes among airlines that reward travelers for booking direct are rearing their heads. Travelers who buy tickets direct from airlines are being lured by financial enticements including add-ons and promotions.

An example of this new environment is who are luring consumers by waiving fees for those who book direct. The airline recently announced policy changes that will see increased carry-on charges ($25 - $100 instead of free) and reduced rewards for miles flown (25% instead of 50%). Those policies, however, will only be in place for those travelers who do not book direct. Travelers who purchase flights via the airline's website will be exempt from the policy changes - they'll pay nothing for carry-on and receive full miles for flights taken.

"It's simple math," says Rick Seaney, chief executive of comparison site "If it costs you, the airline, $16 to sell a ticket somewhere else and $2 on your own site, you have some money to play with."

Image via Shutterstock

Tags: airline, consumer preferences, online travel agent, travel trends

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