Cutting Out the Middleman May Cost An Airline More Than It Saves

Airlines aiming to gain leverage by pulling out of intermediary channels may want to think twice. Even travelers who typically book directly on airline websites often shop elsewhere, according to a recent Phocuswright report, Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel. Online travel agencies (OTAs) frequently play a leading role in the air shopping process, even when they do not get the bookings.

Among airline website bookers, a majority (57%) typically also shop for travel on supplier websites. Yet the remaining 43% do not use supplier website when shopping – meaning that four in 10 are making purchase decisions elsewhere. Most often, these channel switchers are using OTAs to make their decisions.

Over half of airline website bookers typically use OTAs when shopping for travel. In fact, 22% of airline bookers shop on OTAs without hitting supplier websites. Consequently, an airline risks losing one out of five of its own website bookers if it pulls completely out of OTAs. Flying solo is therefore a very risky proposition. American Airlines' break with Orbitz and recently resolved impasse with Expedia are well-publicized examples of how heated the relations between airlines and intermediaries can get. Ultimately though, however much airlines want to control distribution, consumer preferences secure a spot for OTAs in the air distribution landscape.

Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel provides insight into key issues that shape travelers relationships with airlines, and analyzes how those relationships impact the leisure air travel landscape. The report studies air shopping and booking behavior among U.S. travelers, measures consumer sentiment toward airlines, and examines the factors impacting traveler loyalty. Key topics include:

• The role of intermediaries in the air shopping process
• Traveler interest in ancillary products
• Traveler attitudes towards airlines, and trends over time
• Attitudes and behaviors of airlines' most valuable customers, including business travelers and those with high annual travel spend
• Incidence of behavioral loyalty toward airlines, impact on booking channel, and loyalty drivers

This report, a derivative of Phocuswright's Consumer Travel Report Third Edition (forthcoming), is essential reading for travel companies throughout the air distribution chain. As airlines seek to minimize distribution costs and boost earnings with new, bundled services, the consumer perspective remains a crucial – but often overlooked – success factor. Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel (US$695), a Global Edition publication, tracks the most important traveler trends impacting air travel sales and distribution.