August 5, 2008
Kayak has pulled AA fares from its website. Or AA has withdrawn itself from Kayak. Depending on which headlines you read.
American Airlines and Kayak disagreed about how AA fares would be displayed on Kayak — specifically if fares would be displayed via AA.com or through Orbitz or other partners.
The “CEO of a competing travel site” leaked information to TechCrunch last week suggesting that American Airlines would have to pay a double fee for its fares sold on Orbitz via Kayak. This doesn’t makes sense as far as I understand it: Orbitz would pay Kayak for the lead, and American would pay Orbitz for the sale. This is a surprisingly oft-quoted comment given it doesn’t make sense and unnamed sources from competing sites aren’t exactly unbiased credible sources.
According to an American Airlines’ spokesman, the airline wants to retain control over its distribution and it requests from Kayak the same linking policy as it has with Mobissimo and Farecast.
From Kayak’s perspective, they can’t offer exclusive listings to airlines and maintain relationships with online travel agencies who provide access to carriers with whom Kayak doesn’t have relationships as well as cross carrier airfares.
Rock, meet Hard Place.
I think the essential missing piece of information behind this dispute is how many people selected the American fare through an online travel agency that, in all likelihood, had a higher price point that included a service fee.
According to Compete, Sidestep and Kayak directed 1.3 percent of traffic to AA.com. AA has launched an email campaign to passengers who have booked an American flight through Kayak or Sidestep in the last year, offering 1000 bonus AAdvantage points to return directly American next time.
So the question is: what proportion of that 1.3 percent will be driven directly to AA.com by the 1000 bonus points? And, at 1 cent a mile, will American end up ahead?