Travelers Lose As Airlines, Online Sites Square Off

03/07/2011 12:00 AM

03/07/2011 5:03 PM

It takes luck to snag the kind of deal I found on Delta Air Lines for a spring flight to Istanbul. I owe it to Kayak.com, a "meta-search" travel site that scans hundreds of fares on airline and online-travel sites, then links customers to those sites for booking.

A routine morning check showed the flights I'd been tracking for weeks dropped from $1,400 to $989.

Within seconds, Kayak linked me to Delta's website and the itinerary I selected. I hit "Review and Purchase" and bought the tickets. An hour later, the price was back to $1,400.

Fares on other European flights plunged that day, then quickly disappeared, causing some to suspect a pricing error. Delta wouldn't say what happened, but I was more convinced than ever of the value of online-travel search sites to ferret out the best deals — fast.

Now a standoff with the airlines threatens to dilute the usefulness of these sites, or in some cases, cut them out entirely.

American Airlines fired first in December when it pulled its flight and fare information from Orbitz.com. Unlike Kayak, Orbitz — along with Expedia, Travelocity, CheapTickets and others — are online-travel agencies in business to sell tickets directly.

The fight began over the fees airlines pay to list flights with the online sites, then quickly escalated. Before American could drop Expedia, Expedia and its sister website, Hotwire, dropped American. Delta still shows its fares on Orbitz and Expedia, but has blocked its listings from a dozen smaller sites.

The airlines want more say over how travel websites display their fares, and more control over who provides the information — global distribution systems such as TravelPort, owned by Orbitz, or the airlines themselves.

Bottom line: With the pressure on to find new sources of revenue, the airlines not only want to sell more tickets. They want first crack at selling vacation packages, premium seats, preboarding privileges and other add-on services that generate more than $1 billion annually.

Chances are most will not go the way of low-cost carriers such as Southwest and Allegiant Air which refuse to list fares anywhere but on their own websites. But as the big carriers look for new ways to make money, they will be more selective about with whom they do business, and that will make fare-shopping more difficult.

Consider what I found while searching for a flight between Seattle and Maui on Bing Travel (www.bing.com/travel), Microsoft's meta-search site. I like Bing for its built-in "fare predictor" that uses algorithms to determine if a fare is likely to rise or fall in the next seven days, but booking a flight on Alaska Airlines turned out to be a hassle.

Bing showed a low fare of $451 on Alaska, including taxes and fees, for the dates I selected. But Alaska doesn't have an agreement with Bing to provide a direct link to selected flights. So when I clicked on Bing's link to Alaska Air, instead of seeing the itinerary I chose, I was taken to a list of one-way flights and fares displayed without taxes and fees.

One of the boldest moves yet is Delta's decision to pull its fares from FareCompare.com, a meta-search site founded in 2006 by Rick Seaney, an airline expert known for the insider advice he dispenses on fare sales, price increases and the best times to buy.

FareCompare, which had no direct-link agreement with Delta, had been using fare data supplied by Orbitz. In January, Delta asked Orbitz to stop supplying its data to FareCompare and other sites. Orbitz complied.

Seaney's confident he'll win back Delta's business, but on what terms? How long before the airlines put the squeeze on FareCompare and others to ratchet back on their consumer tips or skew results to favor one airline over another?

Kayak.com recently struck a deal with American to offer Kayak users a 10 percent discount. When I searched Kayak for flights to Boston, Chicago, New York, Cincinnati and other cities, American's fares, although not the lowest, were the first to flash across the screen.

All things being equal, it's always better to buy a ticket directly from the airline rather than from a third-party site, but for comparison shopping, ITA Software (www.itasoftware.com) may be the best place to start.

ITA supplies the search technology used by many airlines and online-travel sites. Its database of fares is robust, unbiased and comprehensive, but it doesn't sell tickets or provide handy links.

The U.S. Justice Department is currently deciding whether to allow Google to buy ITA for $700 million. Most online-travel sites oppose the move, saying it would reduce competition since Google would own the technology used by competitors, such as Microsoft's Bing.

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