Comparison shopping is key to protecting consumer choice, but is threatened by airline attempts to bypass independent distribution channels.
That is the conclusion of the report on ‘The Impact of Airline Consolidation on Consumer Choice’, published this week.
It notes: “Carriers’ relative bargaining position has been strengthened through consolidation and direct access to consumers and agents” and this “threatens the business models of independent distribution platforms that are the primary source for comparison shopping.”
It warns: “Carriers are employing commercial practices to shift consumers to their own websites where they avoid comparison-shopping, avoid ‘head to head’ competition and upsell services to consumers.
“This strategy has accelerated as consolidation has increased the size of the airlines, and the ability to coordinate product between alliance partners. Consolidation has made it easier to coordinate new industry distribution standards and direct connections to agents.”
This is a reference to airline association Iata’s new distribution capability (NDC) standard.
British Airways and Iberia announced direct connect deals with travel management company Hogg Robinson Group (HRG) last week to utilise NDC technology, although the deal excludes the UK, Italy and Switzerland.
The IAG-owned airlines will impose a €9.50 charge on GDS bookings from November 1, but the agreement means HRG bookings of BA and Iberia across the rest of Europe will not attract the fee.
BA and Iberia announced similar deals with the UK-based Lotus Group, which operates DialAFlight and Supertravel, and leisure agency Travel Up last week.
The report argues such moves mean “independent comparisonshopping channels risk being disintermediated” and warns imposition of GDS fees “may reduce the long-term health of independent distribution outlets”.
It calls for the maintenance of comparison shopping, suggesting: “Consumers need independent distribution to find lower cost alternatives and to make trade-offs between service and prices.”
The report, produced by aviation consultancy GRA, was commissioned by the European Travel & Technology Services Association (Ettsa), the European federation of travel agents’ and tour operators’ associations Ectaa, and the European Passengers’ Federation (EPF).