Here’s Why Airlines Want to DITCH Travel Agencies

Atmosphere Research Group co-founder Henry Harteveldt has said that airlines and travel sites have “a very, very dysfunctional business relationship.” This speaks to a recent move airline carriers are making to get away from agencies such as Expedia (NASDAQ:EXPE), Orbitz (NYSE:OWW), and Travelocity.

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Daniel Shurz, a senior vice president at Frontier Airlines (NASDAQ:RJET), said, “There’s no reason for our customers to want to book anywhere else.” Frontier, and major carriers such as Jetblue (NASDAQ:JBLU), Spirit Airlines (NASDAQ:SAVE), and Virgin America get most of their ticket sales from agencies, but the fees associated with those transactions are eating into their profit margins.

Southwest (NYSE:LUV) spokesman Chris Mainz said: “We think we can have better control over the customer experience by dealing directly with [customers].”

Agencies don’t offer real-time seat maps, information about in-flight entertainment, and seamless booking. Expedia CEO Dara Khosrowshahi counters this opinion by saying that online travel agencies offer comparison shopping and the ability to mix and match airlines for a single trip, which is “something you can’t do on an airline’s site.”

In the battle for point of purchase, it may come down to convenience versus cost. As the world tightens its collective financial belt, the airlines and their customers both have good reason to try and dodge around the middleman.

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