AA "de-preferenced" by Expedia - "suspension" now lifted April 4, 2011
#31
FlyerTalk Evangelist
Join Date: Dec 2003
Location: Benicia, California, USA
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Posts: 10,820
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.
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.
#32
Join Date: Dec 2007
Location: Las Vegas
Programs: DL Platinum, AA Lifetime Gold, Hilton Diamond, Marriott Platinum, Radisson Premium
Posts: 6,635
Looking at this a second time, I'd say it's a kind of in your face move by Expedia. It purposefully makes it more difficult for the customer to book on AA "just because."
No one knows how to conduct themselves like adults anymore it seems.
No one knows how to conduct themselves like adults anymore it seems.
#33
Join Date: Oct 2010
Location: SEA
Programs: UA 1K, AS MVPG, DL GM, Marriott Titanium, Hilton Diamond
Posts: 2,266
Is it???
I don't believe it is at all. They are already a struggling airline and losing a couple of the main third party companies is only going to hurt their revenue. I know of quite a few businesses that are pretty large in size that use Orbitz for Business to book tickets.....with AA gone, they just lost a lot of revenue there that will now have to go to other airlines.
Another large issue that AA will face is that Expedia and Orbitz allow customers to see all options for airlines, times, etc in one spot. Only loyal AA frequent flyers will be going to AA.com. AA will lose a huge chunk of the leisure segment that just buys tickets based on price/convenience. Since AA won't be listed on these sites, they are in trouble and will lose a number of passengers. While I understand that these passengers are low yield, they are a necessary part of business.....they are filling last minute seats, giving AA guaranteed revenue and baggage fees and other ancillary revenue (change fees, onboard purchases, etc). I personally think this is a really really stupid move on AAs part and is going to make their business take a big revenue hit. Never fun losing customers (no matter how low yield they are) because that is $$$$ out of AAs pocket and bottom line as well as empty seats that could have been sold via these third party sites.
I wish AA the best of luck but I fear that this will hurt them and if other airlines don't follow suit, AA will be secluded again and in the financial situation they are currently in, we could have some real issues ahead for AA....
I don't believe it is at all. They are already a struggling airline and losing a couple of the main third party companies is only going to hurt their revenue. I know of quite a few businesses that are pretty large in size that use Orbitz for Business to book tickets.....with AA gone, they just lost a lot of revenue there that will now have to go to other airlines.
Another large issue that AA will face is that Expedia and Orbitz allow customers to see all options for airlines, times, etc in one spot. Only loyal AA frequent flyers will be going to AA.com. AA will lose a huge chunk of the leisure segment that just buys tickets based on price/convenience. Since AA won't be listed on these sites, they are in trouble and will lose a number of passengers. While I understand that these passengers are low yield, they are a necessary part of business.....they are filling last minute seats, giving AA guaranteed revenue and baggage fees and other ancillary revenue (change fees, onboard purchases, etc). I personally think this is a really really stupid move on AAs part and is going to make their business take a big revenue hit. Never fun losing customers (no matter how low yield they are) because that is $$$$ out of AAs pocket and bottom line as well as empty seats that could have been sold via these third party sites.
I wish AA the best of luck but I fear that this will hurt them and if other airlines don't follow suit, AA will be secluded again and in the financial situation they are currently in, we could have some real issues ahead for AA....
#34
FlyerTalk Evangelist
Join Date: Aug 2003
Location: MSY (finally); previously NYC, BOS, AUH
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#35
FlyerTalk Evangelist
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Location: PHL, NYC
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When AA sees big drops in bookings, they'll know that aa.com hasn't been the place people go to book. If that happens, it won't be long before we see them back on Orbitz and Expedia.
#36
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
If Orbitz, Expedia and such online TAs manage to push back successfully against AA's efforts that have got the OTAs riled up, that's good news for this consumer.
#37
FlyerTalk Evangelist
Join Date: Aug 2003
Location: MSY (finally); previously NYC, BOS, AUH
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Posts: 17,203
Don't you think AA knows the precise sources of its bookings today?
Last edited by Blumie; Dec 23, 2010 at 5:45 pm
#38
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Expedia doesn't want those customers who select AA as their preferred carrier when starting searches to jump away from using Expedia.
#39
Join Date: Aug 2010
Location: Texas
Programs: AA EXP, UA Premier Plat, Alaska MVP Gold, HHonors Diamond, SPG Platinum, Hyatt Platinum
Posts: 2,053
I don't see this as a big deal.
#40
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Unless AA pulls the plug on letting Expedia make bookings on AA ticket stock, I don't see that as being the case necessarily. Expedia customers who are looking specifically for AA tickets can still do so on Expedia by searching in the manner that such customers do: by selecting American Airlines on Expedia.
#41
Suspended
Join Date: Sep 2006
Programs: AAdvantage PP
Posts: 13,913
I would also assume that a bulk of these people (but not every single one) are using a third party site to find the cheapest fare. Of course, the fee cuts into probably what is already a near non existent margin. However, as others have said not having the listing excludes AA from a number of potential flyers and not to mention all the wonder fees which are the real profit driver.
My guess this is AA's way of attempting to get Orbitz to lower their fees.
My guess this is AA's way of attempting to get Orbitz to lower their fees.
#42
Join Date: Aug 2010
Location: Texas
Programs: AA EXP, UA Premier Plat, Alaska MVP Gold, HHonors Diamond, SPG Platinum, Hyatt Platinum
Posts: 2,053
Whether this means more of a push for business extraa, or working directly with corporate travel departments, or AA simply testing the waters to see what other airlines and travel sites do, there's certainly a plan and a calculated set of risks/benefits they're watching. They've also likely determine which consumers will be affected, and how that balance will shift out. Without knowing where AA's revenue comes from (in terms of each set on the plane, each plane on the schedule, etc.), it's hard to know where they expect to see offsetting benefits and losses, but you can be sure they've made their prediction.
Either way, while they provide services to consumers, they provide VALUE to stockholders... and that's who provides the significant source of funding for their ongoing operations.
#43
Join Date: Jan 2010
Location: MIA
Programs: AA, DL, BA
Posts: 117
I think this holds true only if we are talking about knowledgeable travelers {And I believe that Flyertalkers are not a true sample of the general public}
- Most leisure travelers do not know about the hubs. I am willing to bet that half of the people in Miami and Dallas do not know that American is by far the dominant airline there.
- As long as Expedia shows a couple or more choices with prices the average traveler will make his choice from the ones displayed.
- People care about their time, going to another website makes it inconvenient to the traveler even the business traveler.
#45
Join Date: Jun 2010
Location: DFW
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Posts: 317
I used to use the corp travel dept for all my travel.. they would charge my dept dept $20 just to book a ticket.. then if you had an issue with travel after hours its another charge. Forget that.. AA.com works just fine for me. As much as I travel.. I think I am mentally competent enough to figure out if I am being scr*wd on a fare to a location.