Flight comparison sites at centre of government market study

Flight comparison sites at centre of government market study

Flights will be at the centre of a market study launched by the government to scrutinise comparison websites.

The study has been welcomed by the three leading flight comparison sites, Cheapflights, Skyscanner and KAYAK, which all say the industry relies on trust and transparency.

The Competition and Markets Authority will be looking into how ‘digital comparison tools’ such as comparison sites and mobile apps are working for consumers, business and the economy.

Flight comparison sites are one of four case study areas in the analysis, along with broadband, home insurance and credit cards.

They may be forced to disclose how much commission they receive from airlines.

But the findings hope to give an understanding of other travel industries that use online comparison – such as hotel bookings, package holidays, travel insurance and car hire – and influence government policy in the area.

Andrew Shelton, managing director of Cheapflights, said: “We’d want to better understand the scope of this study, but we welcome anything that encourages transparency and helps build trust between brands and products like ours, and our users.

“The beauty of the metasearch technology that powers Cheapflights is that it is wholly independent and unbiased, meaning we are able to give an honest view of a complex marketplace often corrupted by adverts and bias.

“Building trust is central to our culture, so we’d be happy to be involved in any conversation that helps consumers feel complete confidence in our commitment to provide them with fair and transparent information.”

Skyscanner’s chief legal officer Carolyn Jameson added: “In a very busy marketplace, with a number of differing business models, we hope that the CMA investigation will highlight those players who place the needs of the consumer at the heart of their businesses, and encourage improvement from those that do not.

“At Skyscanner, we believe that consumer trust is vitally important, and transparency should be central to companies operating comparison sites.”

Jameson added that the European Commission created Key Principles for Comparison Tools earlier this year, creating guidelines to improve transparency of price comparison websites and increase consumer trust.

“Skyscanner both contributed to and endorsed these principles,” she added.

The firm has also recently introduced a traveller-driven ratings system. “This takes factors such as price accuracy and customer service levels of the provider into account, which are two areas that consumers are concerned about,” Jameson said.

Suzanne Perry, marketing director at KAYAK added: “We are convinced that the study will show the value of travel search engines for Brits when planning their travels.

“At KAYAK, our main aim is to be a transparent travel tool by providing accurate prices and a comprehensive list of offers to help Brits make the best travel decisions.”

The four key areas the study will explore will be what consumers expect, the impact of digital comparison tools on their suppliers’ competition, how effectively sites compete with each other and regulation.

Andrea Coscelli, acting chief executive at the CMA, said: “Digital comparison tools have played a big part in changing markets for the better, bringing new ways of doing things and forcing businesses to up their game. Consumers have benefited as choice and access to goods and services have grown.

“Since emerging a decade or so ago, such tools have helped to inject significant competition into a number of markets. However, they have been more successful in some sectors than others. We want to understand why this is the case and whether more can be done to ensure consumers and businesses can benefit from them more widely.”

Market studies look into whether markets are working well and can lead to a range of outcomes like changing regulation or imposing self-regulation, or even giving the industry a clean bill of health.

The CMA must announce within six months whether it intends to refer the market for a more in-depth (phase 2) investigation and must publish its report within 12 months, setting out its findings and the actions (if any) it proposes to take.

This website uses cookies to ensure you get the best experience. Learn more