i_fly_AA

Here's something interesting: If you search for a flight to/from an airport that only AA flies to, you get no results at all. You just get an error message. Two examples of this are DFW-SAF and ORD-DBQ.

Xero

AA needs to be careful. WN was able to pull off not selling tickets on 3rd party sites because they created a reputation of being a low fare carrier, so they gave customers an incentive to look at their website. But it's like every time when there is a rift between two companies; the consumer will lose.

Blumie

I just don't buy this argument. How is the consumer going to lose? It's not like expedia has anything close to a monopoly on selling airline tickets. And for consumer looking to find all of their options and the lowest possible costs, they're already screwing themselves if they're not searching multiple sites.

sluggoaafa

Glad someone else sees that WN doesn't use 3rd party sites to sell their tickets, look how great they're doing!!!

chemist661

I just checked LAX-DFW & AA is not listed. Only when one clicks on the nonstop on multiple airlines is where AA can be found and it is buried way down.

DFW is one of AA's big hubs (and HQ).

carlosdca

Are they?

In any case, will the savings result in lower/more competitive price for the consumers? One would hope so.

FlyMeToTheLooneyBin

Why go through all this complication of hiding AA? Why doesn't Expedia just drop AA then? If they want to protest it, go all the way!

vgacolor

Nothing shameful about it, but Expedia is playing it right. They are also making a business decision on how to respond to this threat.

This is similar to what unions used to do with the big three. Pick the one that would be easier to negotiate with in order to get concessions that would have to be matched by the other automakers.

AA picked Orbitz to set the tempo, but I am sure that management did not see this development as a credible possibility. The one that has the most to lose from fighting Expedia is AA. It would be interesting to be a fly on the wall on the conversation happening now or later today in American's top brass office.

Business is business.

elitetraveler

Frankly, this is just another chapter in the story that began with deregulation in 1978.

In the beginning, legacy carriers embraced travel agents as a distribution channel that could expand more cost effectively than CTOs to handle the growth

Then they saw agencies as a way to shield themselves from new entrants via biased GDSs they owned or controlled

Then they came to believe that distribution costs in the form of commissions and overrides were too high and the internet would enable themselves to create a direct relationship to the end user/customer, both leisure and corporate

Then they helped create the next wave of travel agencies via their online agency initiatives.

Then with industry crises they spun these and the GDSs to raise cash and focus on the core business of selling miles and flying planes

Then they got upset they were losing pricing control of their product and that distribution costs were back on the rise.

At least that's how I would summarize the past 30 + years

sbm12

Highly unlikely.

This whole thing is, indeed, a strange move on AA's part. It is similarly strange on the part of Expedia - they lose money, too, when they don't get the transaction, but odds are that the folks using them to compare prices will more commonly just buy the cheapest of what is displayed than search aa.com also. That's Expedia's bet and AA is betting the opposite. Definitely a bit of brinkmanship going on here with each trying to force the others' hand.

elitetraveler

Of course Expedia also sells advertising based on the traffic generated by consumers who only come to compare, so if traffic falls, so likely would ad revenues.

3Cforme

AA can double-down with a few TV commercials and newspaper ads:

Don't bother looking on Expedia or Orbitz for tickets on American Airlines. Look to aa.com, always for our guaranteed lowest fare.

The AA brand is plenty strong enough to go that route if AA wishes.

Stripe

Dropping Orbitz was not a big deal but if this starts spreading to all third party sites it changes things considerably. Because the GDS cost is not commensurate with any value received, AA's decision makes some business sense. But they are playing a dangerous game and that will succeed only if other airlines follow suit. Much like DL's decision in 2002 to stop paying commissions to travel agents.

WN occupied a niche and was able to get away with this practice. But AA occupies no such niche (or any niche for that matter) and the competitive disadvantages could quickly outweigh any cost savings. Especially if this starts to impact corporate bookings.

As a consumer, I hope this gamble pays off for them. It is I, after all, who ultimately pays the GDS. But it is a risky gamble indeed.

FlyerTalker688786

Without the extra expense in GDS, anyone who book directly with AA could benefit from it as no booking fee or credit card fee would ever impose to customers.

Smart consumer will still shop around for choice. But AA made the move as the first in industry to get rid of middleman, which is logical, and long being seen as future of airline indutrsy. If AA successed, other mainline airlines will follow.

The point is, AA is doing its best in deliverying value to customer. The end result may differ from individual case, but I do hope AA could achieve its goal on cost saving.

vgacolor

I think the amount of money that online travel agencies spend dwarfs the amount that airlines spent by a mile.

When was the last time that you saw an AA, Delta, US or UA/CO TV commercial?

I think Expedia spends more than a billion US$ a year in ads.

Right now the only winners are the competing airlines.