Finnair content removed from Sabre and Abacus GDSs
Feb 16, 2020, 1:59 am
#19
Join Date: Jan 2006
Location: Helsinki-Vantaa APT, Finland
Programs: AY LUMO
Posts: 6,055
Okay, Finnair ended co-operation with OTAs selling too cheap. They are fighting now in Sweden.
From travelnews.se:
2020-02-07 14:06 av
Travel News
SRF anmäler flygbolaget Finnair till Konkurrensverket
SRF reports the Finnair airline to the Swedish Competition Authority
Today, the Swedish Travel Agency and Organizers submit a notification to the Swedish Competition Authority and the Finnish Competition and Consumer Agency. The application is aimed at the airline Finnair, which has closed a number of travel agencies. The airline does not want the travel agencies in their marketing, among other things, price comparison sites, to show a price that is lower than Finnair's own price. - Finnair has closed down travel agencies that sell their tickets cheaper than themselves. This leads to higher prices and is worse for consumers, says Didrik von Seth, secretary general of the travel industry association SRF.
Just before Christmas, Finnair closed a number of travel agencies in Sweden and Finland. Finnair claimed that the prices shown by these travel agencies and sold via so-called price comparison sites were lower than their own prices. Finnair does not like this and has therefore closed these travel agencies.
"The airlines have a self-interest in keeping prices up while travel agencies want to help their customers find the cheapest and best alternatives," said Didrik von Seth. Shutting down those travel agencies that are lower in price than Finnair itself is a way to limit competition.
Price comparison sites have been developed into major marketplaces for airline tickets where most online travel agencies and some airlines are located.
- In order for customers to be able to have full transparency and access to the cheapest tickets, it is important that the price shown in all marketing is final, which is a prerequisite for free competition, says Didrik von Seth.
https://www.travelnews.se/finnair/sv...kurrensverket/
From travelnews.se:
2020-02-07 14:06 av
Travel News
SRF anmäler flygbolaget Finnair till Konkurrensverket
SRF reports the Finnair airline to the Swedish Competition Authority
Today, the Swedish Travel Agency and Organizers submit a notification to the Swedish Competition Authority and the Finnish Competition and Consumer Agency. The application is aimed at the airline Finnair, which has closed a number of travel agencies. The airline does not want the travel agencies in their marketing, among other things, price comparison sites, to show a price that is lower than Finnair's own price. - Finnair has closed down travel agencies that sell their tickets cheaper than themselves. This leads to higher prices and is worse for consumers, says Didrik von Seth, secretary general of the travel industry association SRF.
Just before Christmas, Finnair closed a number of travel agencies in Sweden and Finland. Finnair claimed that the prices shown by these travel agencies and sold via so-called price comparison sites were lower than their own prices. Finnair does not like this and has therefore closed these travel agencies.
"The airlines have a self-interest in keeping prices up while travel agencies want to help their customers find the cheapest and best alternatives," said Didrik von Seth. Shutting down those travel agencies that are lower in price than Finnair itself is a way to limit competition.
Price comparison sites have been developed into major marketplaces for airline tickets where most online travel agencies and some airlines are located.
- In order for customers to be able to have full transparency and access to the cheapest tickets, it is important that the price shown in all marketing is final, which is a prerequisite for free competition, says Didrik von Seth.
Feb 16, 2020, 6:08 am
#21
Moderator, Finnair
Original Poster
Join Date: May 2011
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Posts: 14,174
Sweden is a very large market for Finnair. And swedes do take consumer protection seriously. Limiting competition / price cartel is not viewed faveroubly by consumers.
OTOH, those who are loyal to Finnair may already use Finnair tools. Either throught finnair corporate portal or the normal webpage. It is the flow of price sensitive flyers they are risking, and only AY knows how large that is.
Regardless, this will hurt their brand seriously.
OTOH, those who are loyal to Finnair may already use Finnair tools. Either throught finnair corporate portal or the normal webpage. It is the flow of price sensitive flyers they are risking, and only AY knows how large that is.
Regardless, this will hurt their brand seriously.
Feb 16, 2020, 7:28 am
#22
Join Date: Sep 2005
Location: HEL
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Posts: 8,749
AY apparently used to pay a commission to OTAs (even though some years ago they were supposed to abolish those). And OTAs decided that they'll return part of that commission to the customer. I don't understand why this would be so bad for AY.
Feb 16, 2020, 7:40 am
#23
Moderator, Finnair
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Join Date: May 2011
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Quiz to pass before being accepted for a sales/marketing job.
Complete the following sentence. Multiple choice - more than one answer is correct.
Finnair claimed that the prices shown by these travel agencies and sold via so-called price comparison sites were lower than their own prices. Finnair does not like this and has therefore...
a) ... closed these travel agencies.
b) ... lowered prices on their own site.
c) ... decided to accept that in a price-fixated market it is good to offer different prices to different market segments
d) ... enhanced their own web-page and offer so the price premium is offset by a higher value to the customer
(hint: all answers beside one is the correct)
Complete the following sentence. Multiple choice - more than one answer is correct.
Finnair claimed that the prices shown by these travel agencies and sold via so-called price comparison sites were lower than their own prices. Finnair does not like this and has therefore...
a) ... closed these travel agencies.
b) ... lowered prices on their own site.
c) ... decided to accept that in a price-fixated market it is good to offer different prices to different market segments
d) ... enhanced their own web-page and offer so the price premium is offset by a higher value to the customer
(hint: all answers beside one is the correct)
Feb 16, 2020, 7:41 am
#24
Join Date: Jun 2018
Posts: 369
I assume that they get a lot more value with upsell of other products and services when customers are booking on the finnair website thus creating a direct booking a lot more valuable for them.
Feb 16, 2020, 8:14 am
#25
Join Date: May 2014
Location: HEL
Programs: AY+Plat, ALL Plat, Scandic L2
Posts: 3,620
You'd think that the contract covering the commissions forbade sharing the commission with customers. In that case, I don't see what the OTAs are complaining about ??
Feb 16, 2020, 8:45 am
#26
Moderator: Lufthansa Miles & More, India based airlines, India, External Miles & Points Resources
Join Date: Dec 2002
Location: MUC
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Posts: 48,165
The OTAs often publish a price lower than the list price to the comparison websites like kayak and then try to nickel and dime the customer by selling them ancilliary products or overpriced add one (luggage and seating reservation at a price higher that the airline charges). Smart shoppers save that way (by opting out of all add ons) and live goes on. Unfortunately many don't and then call the airline asking to fulfill the promise made by the OTA. AY probably noticed that such booking costs them more mainly because the OTA doesn't what a TA is supposed to do for the commission they get (rebook during irreg etc). This is an ongoing battle, but I doubt it is the reason of the switching off access to Sabre and Abacus. That is related to the cost AY has to pay these companies to distribute their inventory.
Feb 16, 2020, 8:54 am
#27
Moderator, Finnair
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Join Date: May 2011
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OTA uses this "undercutting with their own money" only when market demands it.
Tickets sold thorugh the aggregators are aimed at buyers looking for lowest price. Most tickets sold there would not be sold unless you offer lowest price. OTA and aggregators allows Finnair to keep a relatively high price at their own page, and still attract the cheapest crowd via the aggregators.
I think elventhor has it right. It is about ancillary revenue. Someone decided increasing ancillary revenue is a more important target than all others. Thus it is more important to only sell tickets at their own web site, even if that means lower number of tickets sold.
Feb 16, 2020, 9:03 am
#28
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.... Unfortunately many don't and then call the airline asking to fulfill the promise made by the OTA. AY probably noticed that such booking costs them more mainly because the OTA doesn't what a TA is supposed to do for the commission they get (rebook during irreg etc). ...
IME though, many of the OTAs actually are just store-fronts for Finnair. Despite me buying the ticket from a OTA, FInnair is behind it all (ticketing, CC charge, et.c.) The OTA is just a "kommissionär" ('Factor' in English?) and Finnair has agreed on this setup.
And if an OTA sells a bag but won't purchase it from Finnair, leaving the pax in the dry, I'm sure a court case is imminent.
Last edited by intuition; Feb 16, 2020 at 9:09 am
Feb 16, 2020, 11:43 am
#29
Join Date: Apr 2019
Programs: AY Platinum/OWE
Posts: 195
I do hear that booking with OTAs can quickly go sour in the case of any IRROPS (which is why I never use them), but doesn’t the negative publicity usually stay with the OTA in this case?
Considering that many like buying “cheap” OTA tickets I don’t really understand why it was this important for AY to cut ties with TAs, although I generally do favor to cut out the middle man.
However, I don’t really see how this changes the competition that much – the TAs were hardly providing any real competition as they all sell the same seat. Competition is good – but in commercial aviation this should primarily mean competing carriers.
Considering that many like buying “cheap” OTA tickets I don’t really understand why it was this important for AY to cut ties with TAs, although I generally do favor to cut out the middle man.
However, I don’t really see how this changes the competition that much – the TAs were hardly providing any real competition as they all sell the same seat. Competition is good – but in commercial aviation this should primarily mean competing carriers.
Mar 4, 2020, 9:56 pm
#30
Join Date: Jan 2011
Location: Lafayette, LA
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Posts: 274
One unfortunate result of this change is that AY itineraries are no longer showing up on American Express Travel or Chase Ultimate Rewards flight menus. Although I agree with most of the anti-OTA comments in previous posts, my wife and I do use the Amex and Chase travel sites to book a couple of international business class tickets each year, because they let us pay partly or wholly with heavily discounted Amex MR or Chase UR points. Typically we have purchased one or two Finnair itineraries each year. Two of their best deals have been DCA-BKK (about USD $3300 RT in Bus) and YYZ-BKK (about USD $2600). When I searched availability for these itineraries for this summer and fall, neither showed up on Amex or Chase. At first I thought they'd been discontinued, but then I found both fares for our desired dates on the Finnair site -- without, of course, the option of using MR or UR points. So I did an internet search for "Finnair no longer showing up on Amex or Chase" and found this thread. Fortunately we can wait a couple of months before booking our travel, so I'll be hoping Finnair and SABRE can come to some arrangement, or perhaps that Amex and/or Chase can find a workaround that lets them go back to including Finnair.