Can airlines survive without online travel agents serving as a major distribution source for tickets? We're about to find out.
On the point of a sword
Global distribution system Sabre Holdings, which operates the online travel agent Travelocity, announced that it's standing shoulder-to-shoulder with Orbitz
The rift between American and the OTAs is growing wider, and as the tensions mount, travelers will wait to see who'll blink first. If priceline.com
From Hell's heart, I stab at thee
American's argument is that it wants the GDS middlemen to access fare information directly from its in-house reservation system. By having passengers book directly with the airline, American would be able to upsell them additional services or upgrades, while lowering its own costs. Airlines have become profitable in recent months largely as a result of the many ancillary fees passengers have paid.
Sabre says it's already capable of handling many of those features, and it's unnecessary to change the current system. If travelers were forced to book through individual airlines, they'd lose the ability to compare costs, fees, and services across the industry. The GDS providers have a global view that travelers are able to access; individual airlines don't have that capability.
American argues that its demands are more about customer relationship management than anything else. The GDSes provide a layer between the airline and customer that American wants to pare away. A more direct relationship with passengers will enable it to customize and personalize fares and services.
Stabbed in the back
Turning swords into ploughshares
While American needs to control its costs, it seems increasingly unlikely that it can completely forgo the relatively efficient distribution system Sabre, Travelport, and the other GDS services operate. The growing solidarity against American's plan indicates that this particular knife can cut both ways.
Southwest Airlines and priceline.com are Motley Fool Stock Advisor choices. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.