More for Your Money: What's at stake in fight between American Airlines and online travel agencies

The airline is maneuvering for control over how its fares and services are presented to customers. Critics say its actions and AA Direct Connect may make it harder to find a good deal.Call it "The Case of the Disappearing Flights."

Recent visitors to two big websites that help travelers shop for airline tickets may have noticed a missing player: American Airlines. In a dispute over how American's flights are displayed and at what cost, the third-largest U.S. carrier in December pulled its fares from Orbitz, one of the top five online travel agencies.

Expedia, the biggest such agency, soon stopped listing American too.

Then Texas-based Sabre Holdings Corp., the largest provider of airfares to online travel agencies (including Expedia) and other travel marketers, weighed in. Accusing American of withholding some fares, Sabre pushed the airline's flights down the list on its displays and increased service fees to American, which last week responded by suing Sabre.

The fast-moving showdown, which was still unfolding last week, has frustrated consumers by making it harder to comparison shop for the best fares. In the short run, it's a squabble over booking fees that American pays to travel sellers such as Orbitz and also to Sabre and other so-called global distribution systems.

But that's not all that's at stake. American's bold moves may be the first shot in a war that could change how travelers buy air tickets and also, critics say, make it harder to find a good deal.

"It's 100% about control," American spokesman Ryan Mikolasik said of his airline's scuffle with Sabre and the global distribution systems industry. "They're fighting for control over the airline's products and services and how they're presented to the customer. We're fighting for control."

American wants to sell tickets through its own electronic pipeline, called AA Direct Connect, mostly bypassing global distribution systems such as Sabre, unless, it says, the systems adapt to its demands, which include displaying its lucrative fee services, such as checked baggage and priority boarding, and its many fares that bundle these services.

That move could change how travel sellers such as Orbitz and Expedia display fares, now typically by schedule and price, which makes it easy for travelers to compare airlines' offerings. American wants more choices in fees, fares and services to pop up.

"These changes will ultimately benefit the consumer," Mikolasik said, by tailoring the fare to the traveler.

Sabre and some consumer activists disagree.

"We see American's actions as making it harder to comparison shop, adding costs and disrupting the process," said Chris Kroeger, senior vice president for Sabre Travel Network, the division of Sabre Holdings that runs its global distribution systems.

Without such systems, travel sellers would have to retool to integrate AA Direct Connect into their reservation systems, and "that cost will be passed onto consumers," he said.

Charlie Leocha, director of the nonprofit Consumer Travel Alliance, said AA Direct Connect is "simply a heavy-handed attempt by American Airlines to prevent consumers from easily searching and comparing its fares against those of other airlines."

For a peek into your flight-buying future, as envisioned by American, try booking a round trip, as I recently did, between Los Angeles ( LAX) and New York (JFK) on its website, http://www.aa.com.

My search called up fares from $311 to $2,779 in six categories such as "Instant Upgrade" and "First Flexible." Clicking on a category produced a pop-up chart that paired the six categories across the top with 12 types of services (such as "Same-day Standby" and "PriorityAAccess" and "Checked Bag Charge") that each type of fare might or might not include. Total cells in the chart: 72.

At the top of the chart, a drop-down menu sorted the results by four levels of membership in the airline's frequent-flier program, plus the option "Non-Member." By my count, that made for 360 possible cells in the chart.

Is this any way to buy an air ticket?

Yes, it is, said American's Mikolasik. And 360 cells is just the start.

"We anticipate there could be tens of thousands of different combinations," Mikolasik said.

He said he didn't find the grid confusing.

"Most people are going to look at price first," he said. "They're going to hit the 'Economy Super Saver,' especially if they travel once a year and want a low fare. But if you want more, the grid gives you choices. It gives you so much more flexibility. Instead of hunting for this information, you can proactively ask for it."

For now, he said, AA Direct Connect displays the same basic price and schedule information as a global distribution system. But in the future, it will look more like American's website, with many options.

"Our website is pointing toward the future," he said.

One day, he said, you may start your online airfare search at sites such as Orbitz by entering not only your destinations and dates, but also options such as checking bags and getting in-flight Internet and priority boarding. Your search might call up, for instance, $215 for an American fare that included all these options and $219 for a United Airlines fare that did the same.

American is not the only airline with multiple fare categories tied to services. Southwest Airlines, which has long withheld its fares from online travel agencies, offers three on its website: "Business Select," "Anytime" and "Wanna Getaway." Australia's Qantas offers up to 12 fare categories covering five types of services.

But American, which has several global distribution systems contracts coming up for negotiation this year, has been the most vocal airline in challenging the traditional ways of doing business, and it sees itself as leader.

"We expect competitors and other folks, as their contracts expire, to probably go through a similar thing," Mikolasik said. "We expect them for now to sit back and say: 'Thanks, American, for plowing the road.'"

At the end of that road lie many unanswered questions, said Douglas Quinby, senior director of research for PhoCusWright Inc., a company based in Sherman, Conn., that studies the travel industry.

"As more airlines unbundle, rebundle and merchandise, how will agents and consumers be able to compare offers, when apples to apples become peanuts to pineapples?" he asked. "Agencies and consumers have good reason to be concerned."

Source:http://www.latimes.com/