Are Airlines Wrong to Cut Out the Middleman?

Airlines aiming to gain leverage by pulling out of intermediary distribution channels may want to think twice, according to the latest PhoCusWright research. Even travelers who typically book directly on airline websites often shop elsewhere, according to a recent PhoCusWright report, “Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel.” Online travel agencies (OTAs) frequently play a leading role in the air shopping process, even when they do not get the bookings.

“Among airline website bookers, a majority (57 percent) typically also shop for travel on supplier websites. Yet the remaining 43 percent do not use supplier website when shopping—meaning that four in 10 are making purchase decisions elsewhere. Most often, these channel switchers are using OTAs to make their decisions,” PhoCusWright said.

More than half of airline website bookers typically use OTAs when shopping for travel. In fact, 22 percent of airline bookers shop on OTAs without hitting supplier websites. Consequently, an airline risks losing one out of five of its own website bookers if it pulls completely out of OTAs.

American Airlines’ break with Orbitz and recently resolved impasse with Expedia are well-publicized examples of how heated the relations between airlines and intermediaries can get. Ultimately though, however much airlines want to control distribution, consumer preferences secure a spot for OTAs in the airfare distribution landscape,” according to the report.

The report also studied airfare shopping and booking behavior among U.S. travelers, measuring consumer sentiment toward airlines and examining the factors that impacting traveler loyalty.



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