On Sunday, New York Senator Charles Schumer spoke out about a new practice that some airlines have been doing, and he thinks this calls for an investigation by the feds. Some airlines withhold price and flight data from third-party travel websites, and this is the practice that Schumer thinks the feds should investigate. Schumer said that when airlines do this, then this blocks consumers from being able to locate the best prices.
Airlines are already being investigated by the Departments of Justice and Transportation for alleged collusion, but Schumer would like to see the probe taken further.
Schumer said that at least two airlines have held back important info from sites such as Kayak, Expedia and Orbitz. He said the two airlines were Southwest and Lufthansa. According to NY Daily News, Schumer said that, as a result of the airlines doing this, consumers have no choice but to visit the airlines' website and purchase tickets at a higher price.
According to CBS, Schumer said it looks like airlines are trying to get consumers to their sites. He said that by doing this, the airlines' practices threatens the future of third-party travel sites.
The senator praised the technology that allows consumers to compare ticket prices, and he said that the technology is needed and it is helpful, but it could also be gone in another year or two if nothing is done about what some of the airlines are doing.
Consumers use third-party booking sites to compare flight times and prices from a number of airlines, and this allows them to find the cheapest rate. According to the sites, they account for around 44 percent of bookings. Schumer said that it is amazing that consumers can contact airlines and be told that a ticket is selling for $500, but then they go to a third-party site and can get the ticket for $200.
When consumers use third-party sites such as Expedia, they end up saving billions per year. A few weeks ago, the Travel Technology Association published a report on their site, which said that the lack of transparent and comparable airfare information could result in millions of passengers choosing not to fly due to the higher prices that the airlines may charge for their tickets.
In 2013, Frontier Airlines said that customers wouldn't be able to use Expedia to book tickets, while Southwest has never allow a third-party site to sell tickets. Delta Airlines has also decided to limit data to third-party sites.
Airlines for America, an organization that represents major US airlines, said that airlines have options to sell tickets via their own sites or via third parties and that is why the marketplace works today. It also said that airlines should be able to sell their products based on what is best for their customers, and that the nature of airline distribution isn't going to be changed because a third-party channel has been eliminated.
[Image via Wikipedia Commons]