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Airlines "Deals"


Are airlines saving the best deals for their own websites?

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Jun 04, 2008

The emergence of travel agency sites such as Expedia, Orbitz, and Travelocity signified the first wave of booking airfares online. Then the pre-eminence of travel search engines such as Kayak, Mobissimo, and SideStep heralded the second wave. But now, more and more of the airlines' best fares are not being shared with other channels.

Today, you can never truly feel you've found the best possible deal if you haven't surfed over to a given airline's own branded site. The bad news about visiting branded sites is that it can make searching for the lowest price a more time-consuming and cumbersome process. The good news is there are some great deals hiding on the airlines' own sites.

Today there are three key reasons to shop branded airline sites:

• Lower fares. A few days ago, I found a Web-only fare of just $159 round-trip from Denver to Los Angeles on Frontier Airlines at that carrier's site. The best rate produced by the search engine Kayak for that route on those dates was $220—also on Frontier and also via Frontier's site, but not as low as what was available at frontierairlines.com.

• More choices. Many carriers provide some but not all of their inventory to third-party sites. Therefore, even if you find a matching fare on another site, you probably won't have access to all the available flight options, particularly if an airline offers many frequencies on that route. For example, a few days ago I found 121 outbound and return flight options for a trip from Boston to Atlanta on Delta Air Lines' site. The best Kayak could do was provide 28 flight options for the same trip.

• No fees. By the way, Kayak's lowest fare on that Boston-Atlanta itinerary was $654 via CheapTickets, compared to $648 on Delta's site. That's because unlike many third-party sites, most airlines don't charge booking fees. In fact, in this new era of carriers charging for everything from baggage to window seats, it's going to become increasingly more expensive to book airline seats through any channel—offline or online—other than the airlines' own sites, because that's where the airlines are steering you.

A recent shift in finding deals

Throughout the relatively short lifespan of the Internet, it hasn't always been this way. For several years, in fact, it was common to find a better fare for a given airline on a travel agency site such as Expedia, Orbitz, or Travelocity than on that airline's own site. Even after the advent of travel search engines such as Kayak, Mobissimo, and SideStep, it was clear the airlines were not always saving their best deals for their homepages.

Consider what we found when we conducted extensive apples-to-apples testing of travel sites for Consumer Reports WebWatch in 2004 and 2005.

• When we examined U.S. travel sites selling airline tickets on international routes in September 2004, we found the leading third-party sites—Expedia, Orbitz, and Travelocity—were much better at providing lowest fares and even "closest" fares (within $10 of the lowest price). We noted: "Collectively, the branded airline sites did not perform well by providing lowest and closest fares only 19% of the time." This compared unfavorably with Orbitz at 79%, Expedia at 55%, and Travelocity at 35%. However, we also lauded "impressive performance" by some individual airline sites with smaller samplings, particularly Northwest/KLM at 31%.

• The following year, in March 2005, WebWatch conducted an investigation into purchasing first-class airline tickets online. We conducted 144 trials with Expedia, Orbitz, and Travelocity, and much smaller samplings from the branded sites for American, Continental, and Delta. This time the results had shifted: In 36 trials, Continental provided the lowest fare 31% of the time, which trailed Expedia at 40%, but tied with Travelocity at 31% and led Orbitz at 28%.

It was clear the tide was starting to shift by 2005. In closely examining the performance of the branded airline sites, we found that none of the three travel agency sites provided a lower fare on Continental than was available on Continental's own site. However, one or more of the agency sites did provide lower fares for American and Delta than those two airlines provided on their own sites, besting Delta's site 21% of the time and American's site 30% of the time. We concluded: "Continental's performance would indicate it is more aggressive than its two airline rivals in providing competitive fares under its own online banner."

What seemed like the emergence of a trend in 2005 has become a full-blown reality in 2008. Many airlines—regardless of their size or route maps—are providing some of the sweetest deals on their own branded sites.

It's all about costs

This shift has been intentional on the part of airlines, as they strive to cut costs in every possible way. Distribution remains a significant expense, and it's led to intense analysis of every dollar spent on outside commissions to online or offline agencies, as well as in-house reservations departments. The bottom line is that a branded site remains the cheapest way for any airline to sell its seats.

That's why George Hobica, publisher of Airfarewatchdog, points out that nowadays airlines frequently save their best fares for their own branded sites. Airfarewatchdog is an excellent resource for self-bookers, and its Top Ten Tips provide valuable advice about how to search, when to search, where to search, and how often to search.

An important thing to remember whenever you're shopping at a third-party site is that not all airlines are included in their inventory, particularly low-cost carriers such as Southwest. That's why Airfarewatchdog's mantra is that the big guys—including Expedia, Orbitz, Travelocity, and the travel search engines—don't always capture all the best airfares. Therefore Airfarewatchdog advises: " Increasingly, airlines have 'private' sales, reserving their very best fares for their own sites. With the exception of Southwest, which sells fares on its own site exclusively, most of the airlines that do this are smaller domestic airlines or large international carriers, but we've even seen Delta do it, and we're not talking here just about last minute weekend fares. Alaska, Air Canada, Air New Zealand, JetBlue, Malaysia, Frontier, Qantas, Singapore, SAS, Virgin America, and others are using this strategy. Spirit Airlines frequently has one-cent, one-dollar, and other crazy low fares on its site only."

In fact, over the last few weeks Airfarewatchdog was promoting branded fare discounts such as these:

• USA3000: Tampa to Philadelphia, round-trip for $131

• American Airlines: New York to San Francisco, round-trip in business class for $1,519

• Allegiant Air: Orlando to Chattanooga, round-trip for $233

• Iberia: Boston to Venice (via Madrid), round-trip for $681

Most of these specials are not accessible on third-party sites. However, many of them do carry booking restrictions and caveats and are only available for a short time.

Can't it get easier?

Of course, you may be thinking ... it's hard enough to find a decent fare online, now I've got to surf to USA3000 and Allegiant Air? The booking process will be longer than the flight! It's a fair point. But the answer is that some focused research can pay off and the shopping process need not be overly complicated. If you're searching for the lowest price on a given route, you should know which airlines fly between those airports. If you're not sure, visit OAG. Then check out those airlines' sites directly.

There are other easy ways to find out about branded fares as well. Several years ago, Southwest instituted DING!, an application you can download after selecting up to 10 airports. When you "hear an audible notification" (as in ding!), you'll be alerted to discounted fares in your cities of choice. Other airlines offer similar products—such as American's DealFinder and Frontier's email alerts—that provide notifications for low fares on their sites.

If you frequent a given carrier, it also may pay to sign up for that airline's newsletter, which could contain notifications of special discounts and promotional codes. As Hobica points out, Virgin America recently offered a two-for-one sale between Los Angeles and New York for $140 round-trip—but it was promoted through the newsletter. Alaska Airlines frequently offers promotions in this way as well.

In the end, nothing beats comparative shopping. These days it usually doesn't pay to book the first deal you find.

usatoday.com

Are airlines saving the best deals for their own websites?



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