Delta Playing Hardball With Online Booking Sites, About to Get Boost from the Government

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.

American had its own dispute with Orbitz last summer.

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Appears there is a misquote. I believe the quote actually was “Delta declined to comment on specific cases, but said it “reserves the right to determine who it gives the business to…”
    Not surprisingly, Delta has been blatantly giving “the business” to the consumer.

    “Delta declined to comment on specific cases, but said it “reserves the right to determine who it does business with…”

  2. The question at hand is whether Delta “owns” data that it publishes to the public. This seems to be a rather dubious assertion on Delta’s part. The issue though is whether Delta is able to enforce this by strong arming the online travel industry. Hipmunk seems to have already pulled most Delta fares although they do seem to still show up in roundtrip searches when they are part of a multi-airline itinerary. On one-way searches (LGA-FLL by way of example), you can still see them in search results, but you have a click on the “See Availability” button which takes you to Travelocity to see an actual price.

    Definitely not a good thing for consumers since it means that upstarts with potentially better technology and/or UI’s will be at a disadvantage next to the big OTA’s which may end up putting less pressure on said OTA’s to be innovative given their competitive advantage. It’s sad and unfortunate when stuff like this happens. Additionally, the DOT is looking more and more like a lobbying arm for the airlines of late.

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