Delta has been pulling its fares off of some websites (Wall Street Journal, so Google for the article if you hit a pay wall).
A group of travel websites claims that Delta Air Lines Inc. is cutting them and their users off from its data, adding to industry tensions over the way consumers shop for flights on the Internet.
Delta has removed its schedule and fare information from over a dozen sites, including TripAdvisor Inc., Hipmunk Inc. and CheapOair.com, saying it didn’t authorize the sites to use its data, according to a report to be released on Wednesday by the Travel Technology Association, a trade group for the sites.
I don’t worry so much from a consumer standpoint, the average consumer searches about 10 sites when booking a trip. This is about tug-o-war over data, how ancillary services will be sold in the future, and distribution costs. In other words, a business-to-business scuffle.
But the Department of Transportation is considering rules that would require a website to highlight airlines that are not shown in their searches. This move was conceived off in some sense as a subsidy to Southwest, which doesn’t pay the distribution costs that put its flights onto other websites. DOT wanted consumers to know about Southwest (and similar low cost carrier options that adopt this model).
What Delta’s move underscores is that they’ll be well-positioned to take advantage of DOT tipping the scales towards airlines in the battle over distribution, if DOT moves forward with this requirement.
When Delta pulls their fares off of CheapOAir and FareCompare, those sites then have to provide free advertising that Delta flights should be searched elsewhere.
Legally tipping the scales towards airlines (in addition to limiting innovation by standardizing how airfare searches must be displayed, another part of the pending regulations) limits innovation, and encourages consolidation in online travel booking since scale is necessary to fight negotiating power the airlines will have and better search would no longer be a path towards growth.
Delta makes two claims, one of which reasonable and one much less so.
Delta declined to comment on specific cases, but said it “reserves the right to determine who it does business with, and where and how its information is displayed.” It said it would “continue partnering with a limited, but responsive and adaptable group of online retailers.”
It seems they ought to be able to choose whom to do business with (who can issue tickets for travel, without contractual constraints and industry norms such as IATA’s).
That’s different from controlling the information. There shouldn’t be any reason Delta ought to be able to prohibit displays of factual information about its operations.