Sometimes in business, advertising your product is just too darn expensive and it would appear American Airlines has just come to that conclusion. Earlier this week, the airline decided to cut ties with Expedia.com and Orbitz.com, two of the largest online travel comparison websites because the commissions they paid for each booked ticket was just “too great” in their opinion. Oddly enough, American has not left the space completely, as they still show flights on Travelocity, Priceline and a host of other online booking sites.
Apparently, American Airlines had made some pretty steep demands in terms of pricing and where they’re listings should show on the site and either Expedia or Orbitz was willing to play ball. As a result, American Airlines now advertises the removal of these partnerships on their homepage and will probably begin a new ad-campaign suggesting you buy their tickets directly, similar to what Southwest.com currently does.
The short-term effect this will have on American Airlines and both Orbitz and Expedia is simple. Fewer people will be using these travel comparison websites once they learn that American Airlines is not included and fewer people will be booking American Airlines flights, as all customers who use Expedia and Orbitz won’t realize that American has pulled their listings. Some will simply think that American is not flying that route, or that the flight was too expensive to show on the first page.
However, as time progresses, I expect American Airlines to be just fine, as they can offer more exclusive packages through their own website and save a sizable amount of fees in doing so. I do expect that they begin to pull their listings from other websites, however if I were a travel comparison website, I would bend over backwards to accommodate these guys and charge a very nominal fee to include their flights.
In my opinion, Expedia and Orbitz made a big boo-boo in pushing back at American Airlines. Not that I expect this to happen soon, but a chain reaction could occur where you see Continental, United, Delta and perhaps other airlines doing the same thing. If American can show that this move was the right move, expect the chain reaction to happen quickly. I mean, why pay someone else to sell your flights when you can do it just as effectively for a smaller cost?
So for now, anyone looking to book a flight online who wants to include American Airlines in their search will need to avoid Expedia or Orbitz and find another travel comparison website. But even that could change in the next few months.
Now to our favorite money articles from this past week!
7 Ways to Get Warm on the Cheap @ Wise Bread: I moved to Miami to get warm but that has been anything but cheap. A great list here on how to stay warm without breaking your budget.
Three Easy Ways to Sell Your Broken iPod @ Own The Dollar: Electronics are easily broken and rather than sulk over the destruction of your newest toy, think fast at ways you can claim some or all of your money back.
Happiness Index: South Carolina Ranks Worst @ Main Street: The south seems to be the least happy on this list as the economy is particularly bad but I guess if you live in South Carolina, it’s tough to even get up in the morning.
Do You Protect Your WiFi Signal @ Cash Money Life: Only recently have I decided to protect my wifi signal but after reading this post, I should have done it sooner.
Couponing Yourself Out of the Market @ Weakonomics: Growing up, Sunday’s were always defined as coupon days and we bought every paper you could think of for it’s coupon section. Man, could I cut on the dotted line!
Jobless Claims Drop To Lowest Level in 2 Years @ Huffington Post: While this may sound like fantastic news, many people are running out of unemployment benefits and are still not finding work. Numbers can be very misleading sometimes.
35 New Year’s Resolutions For Your Finances @ PT Money: Can you imagine if you had to keep all 35 of these resolutions? That’s like one every week or two. You’d probably have to quit your job just to keep them all!
Temporary Setbacks Are Not Permanent Failures @ Budgets Are Sexy: Very important frame of mind to understand if you want to be successful. Everyone fails sometime, but it’s how you pick yourself back up that matters.
And this past week, we participated in the following Carnivals: