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Airlines are taking out the middlemen in ticket sales

Jennifer Collins Dec 22, 2010
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Airlines are taking out the middlemen in ticket sales

Jennifer Collins Dec 22, 2010
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TEXT OF STORY

Kai Ryssdal: For those who have yet to buy their get out of town for the holidays plane tickets, this story.

If you want to fly American Airlines, you’re not going to find their fares on the website Orbitz. American has pulled its tickets from the online travel site. Delta’s taking its fares off some smaller travel sites as well. Moving away from easy online sales might seem risky, but Marketplace’s Jennifer Collins reports the big carriers are in a position to gamble.


Jennifer Collins: The major airlines are flying high — they’ve got $23 billion stored away for a rainy day. This year, the industry has collected $4 billion in fees: for example, to passengers who check in bags or change flights. Douglas Quinby is a travel analyst with PhoCusWright.

Douglas Quinby: For the first time in a long time, the airlines have really navigated through the recession very smartly.

Some of the airlines have merged and cut back on flights that weren’t in demand.

Quinby: But as travelers have started to come back, airlines have not been so quick to bring those seats back into the marketplace. So they have less need for third parties.

Middlemen who help sell the excess seats but take a cut. Direct sales give the airlines more power to determine what they charge for fares. Travel marketing expert Peter Yesawich says the other big carriers will be watching Delta and American.

Peter Yesawich: If they’re able to come through this period in a healthier and more competitive position, I think you can pretty much expect to see some other airlines follow suit.

So what does this mean for you?

Yesawich: Well there’s the bad news, and that is as they recapture this pricing power, the inevitable outcome of that is you’re going to see an increase in fares and an increase in rates.

Merry Christmas. I’m Jennifer Collins for Marketplace.

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