UPDATE – Aug. 29: Well that was fast. American says its fares will return to Orbitz effective immediately (and US Airways fares won’t go away).
Effective immediately, American Airlines says it will withdraw its fares from consumer websites “powered by Orbitz” and it will also withdraw merger partner US Airways’ fares effective Sept. 1.
All About Money
As airfare analyst and FareCompare CEO Rick Seaney said, “Consumers love to comparison shop, as they should, because it’s the only way of being sure of getting the best deal,” then added, “Unfortunately, American’s announcement just made that a little more complicated for some.”
The popularity of comparison sites means legacy carriers like American must compete with discounters on overlapping routes, so they try to cut costs where they can and one of those costs is using an online travel agency like Orbitz as a distribution channel. An AA executive was quoted as saying, “We worked tirelessly with Orbitz to reach a deal with the economics that allow us to keep costs low and compete with low-cost carriers,” but clearly the two sides couldn’t agree. Various media sources say so far Orbitz is not commenting.
Q&A – What This Means for Consumers
If you have questions, please tell us in the comments section or on Facebook.
Q: Can shoppers still compare American prices with other airlines?
A: Yes. FareCompare.com has American airfares as well as fares for more than 500 airlines around the world. Other sites offer American fares, too.
Q: If I purchased an American or US Airways ticket on Orbitz, do I have a problem?
A: No. Tickets already purchased are perfectly valid.
Q: Will this affect all business travelers?
A: No. As American notes in its press release, “Corporate clients that use Orbitz for Business to book travel are not affected by this change.”
Q: Does this fare-withdrawal only effect Orbitz.com?
A: No. CheapTickets.com, a wholly owned subsidiary of Orbitz, is also losing American and US Airways fares.
Q: What about booking tickets on Orbitz with American’s code share partners (like British Airways) for flights or flight segments that are actually operated by American?
A: Maybe. An American representative didn’t have an immediate answer on that, but analyst Seaney said it wouldn’t surprise him if such fares were not affected and would remain on Orbitz.
Q: Is this the first time an airline has dropped an online travel agency?
A: No. “This tends to happen every few years, airlines drop OTAs and sometimes OTAs drop airlines,” said Seaney. Does it ever! In 2013, Frontier removed its fares from Expedia. In early 2011, Expedia dropped American from its listings while just a few months earlier, American pulled its fares from Orbitz but those returned about six months later.
Q: Could American fares return to Orbitz?
A: Maybe. As analyst Rick Seaney points out, “It’s happened before, it could happen again.” We’ll keep an eye out for any updates.