OTAs Could Suffer Further. With Ancillaries Airlines Start Rethink of OTA Partnerships

The key assumption that most consumers have is that the OTA of choice has full content. But we are beginning to see that this is not the case.

The much publicized battle between Orbitz and American Airlines and then Expedia and American Airlines has seen more examples join them.

We have Delta pulling out of several OTAs.

In the USA and other international markets the reach of the OTA is actually not as broad as most people think.

Let's take into consideration Southwest that doesn't participate in any OTAs. Then we have RyanAir who doesn't participate in anything.

So the actual reach of say Expedia and Orbitz in terms of product for Air is now less than 70% of available flights.

Subtly too not every airline participates fully in either the GDS nor the OTA. As we can see there have been a number of situations where the GDS provided content is not the complete content available to the GDS. Hidden Classes and restricted content further erodes the element of choice for a consumer in an OTA;s product line.

Most of this has been blind to the user with these product issues somewhat hidden both by the brand might of say an Expedia. But now there is a further impact as we see other vendors applying their muscle and rolling back participation in the OTA. The latest to do this is Enterprise Rentacar and their brands such as Alamo and National. Note that Enterprise is the world's largest car rental company.

In the past there have been some very public battles that were short lived. EG British Airways was not in Expedia when the OTA launched. That was eventually rectified. Holiday Inns was out of Expedia for quite some time - till it too joined in the fun.

It is interesting to note that both Orbitz for Business and Egencia can still access American Airlines product. The same is also true of OWW's CheapTickets brand.

However now the fall out of the lack of full participation is sending those who have signed white label contracts with the big OTAs scurrying to their lawyers to examine the contracts.

Case in point. Alaska Airlines who outsourced its Car, Hotel to a joint arrangement between iSeatz and Orbitz. As can be seen in this screen shot below. The image is a little small but click on it to see the full size and notice the Orbitz statement.

This comes from EasyBiz - Alaska Airlines business product.



Alaska must be wondering what it can do next. And many other white label customers who thought that outsourcing their product content to companies such as OWW (Orbitz) and Expedia was the easy answer.

Interestingly this started as a battle of convenience. The tech companies would give you a software solution and full service provision came from a partner such as a travel agent. OR you chose an OTA who did all the heavy lifting plus had better commissions (in theory) and it was a linked connection. With Ancillary Revenues now a high priority for the airlines, and indeed other vendors this is a hot topic.

Over time those commissions have lowered. Now with product coverage falling - this is a new order. Hmmm time to rethink that strategy.

Cheers