Continental Airlines sent shudders through the online travel world by saying it would no longer pay commissions for fares sold on certain Web sites.
This is not the first time such a declaration has been made by an airline, and the big fear is that it won’t be the last.
Given the impact of the September 11th attacks, and the fact that some airlines have already resorted to withholding meals (now there’s Draconian punishment) and keeping the peanuts under lock and key, Continental’s declaration can be seen as both downright logical … and completely insane.
Perhaps even during these rocky times, the major airline companies still write the rules for their industry. But by shunning Web travel sites, the airlines are biting one of the hands responsible for feeding them.
Two Hands, No Waiting
Of course, other hands feed the airlines, too. That would include your hand and my hand, conveniently consolidated by the U.S. government into a US$15 billion dollar rescue package.
One by one, airlines are lining up for their handouts. And in the process, they’re making sure that everyone knows they can’t afford to pay for airport security either.
So why shouldn’t the airlines turn around and try to squeeze a few additional dimes out of the online travel agents? Why stop when you’re on a roll?
Friend or Foe
Well, here’s why they should stop. The future of travel planning is online, and not even the airlines would deny that’s the case. The Web offers airlines the dream of fully automating the sales process, taking all those pesky employees right out of the mix.
The Internet also offers the promise of immediate access to fare information as well, through a host of channels that will ultimately include wireless devices and the TV set.
Consumers love the new options. And, in theory, so do the airlines. But theyll love it a lot more, they think, once their own Web sites are front and center.
See, what the airlines are asking themselves is, “Why share when you don’t have to?” Like all good, aggressive American businesses, they’ll bully the middlemen — in this case, the online travel sites — however they can.
The thing is, it’s all a bit reckless.
Yes, the airlines are run by smart people. But even they can’t possibly predict what the future holds. Messing with Travelocity now, when it may yet become the dominant online travel agent in a few years, is a big risk.
Sure, other airlines may well follow Continental’s gutless lead — announced in a one-paragraph press release that concluded with the assurance that the airline would have “no further press comment” on the matter.
Of course, Continental doesn’t want to comment further. What is it going to say? That it can’t afford the fractional commissions? That the Web isn’t an important source of fare sales?
Either way, Continental looks silly.
No airline wants to have to explain a shortsighted move like the withholding of sales commissions from Web travel sites. The more that they try, the more words they’ll have to eat when the future sneaks up and bites them in the tail section.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.