Two years ago American Airlines transformed the travel industry by charging for checked bags. It may be on the verge of changing the way we fly again.

 

What’s more, Nash said airlines that normally absorb a 3.2 percent fee for credit card transaction are now threatening to pass those charges onto consumers as an additional fee.

Leocha said another major unanswered question is whether travelers who use an online travel agent to purchase airline tickets as opposed to booking through an airline site will be able to transfer to another airline in the case of a big snowstorm that cancels flights or mechanical problems.

“Say you bought a ticket with Orbitz on United,” he said. “What happens if the United flight is canceled. United usually reaches out to other airlines to handle this person. But will American take a United ticket written on Orbitz or put the Orbitz customer on the bottom of the list?”

As an example, he said fliers who book a trip on Priceline are not allowed to get a ticket reissued on any other airline so are stuck until a seat opens up on the airline where the ticket was purchased.

“This is not good for the consumer,” Leocha said. “This doesn’t give them the flexibility they used to have.”

American Airline fares have not been available on Orbitz since Dec. 21. Orbitz spokesman Brian Hoyt said revenue earned on American Airlines tickets and associated ancillary products including car, hotel and insurance accounted for 5 percent of the site’s revenue for the nine months that ended Sept. 30. From the fourth quarter of 2009 through the third quarter of 2010, Orbitz Worldwide generated $800 million of sales for American Airlines.

“American Airlines’ decision will lead to higher prices and confusion for corporations, business travelers and consumers alike,” said Mike McCormick, executive director and COO of the National Business Travel Association. “Travelers wanting to fly American will now need to bounce back and forth across multiple websites to book a trip. American’s decision does nothing to help business travelers or their employers.”

Leocha said the bottom line is that American’s action is anti-consumer. He said extra fees generated from such practices as charging for baggage, reserving a seat, using a blanket, booking through a human agent or changing a flight are making up most of the profits for airlines.

Consumers such as Tony Hoagland of Salt Lake City may ultimately pay more for the privilege of flying.

“I need to find the fairest price for all the airlines,” said Hoagland, who recently booked a bicycle trip to France and bought an airline ticket for his daughter to fly between Salt Lake City and San Francisco using online travel sites. “I just want a level playing field.”

 

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Comments (3)
  • Larry Fish on Jan 8, 2011

    Thanks Geny for a well writen interesting article.

  • Stewies Corner on Jan 8, 2011

    Nice Article, I don’t see the point of middle men anymore for plane tickets when it can all be done online.

  • Ryan Bataille on Jan 8, 2011

    Nice share Geny.

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