Kayak & AA…One Tough Divorce
If you’ve been following travel news, you probably already know that Kayak and American Airlines are having a lovers quarrel. But before I dive into this mess, here is a brief explanation of how Kayak operates (for those of you who don’t know).
Kayak aggregates fares from all of the other online travel agencies (OTA’s) as well as the airlines themselves. As a result, they are able to provide the most comprehensive set of fare selections, and consequently, the lowest published airfare available (shameless plug:Travelfli is building a similar engine for award search and regular published fare search).
Kayak does not book tickets. Rather they present the user with the lowest possible fares, and when a user clicks on it they are transferred to the particular website to book their ticket. Kayak, in turn, gets a small commission for each booking that originates on their site.
American Airlines reportedly asked Kayak to stop displaying the fares from their site alongside fares from OTA’s, including Orbitz, Expedia, etc.
The reason behind their demand remains ambiguous. The first Techcruch report said that American was forced to pay a double tax to Kayak and Orbitz when users booked fares through Kayak that Orbitz fulfilled. Other reports surfaced saying it was more of a contractual disagreement. As it stands, one or both parties severed the ties. Effective now, American Airline’s fares will not be published on Kayak. You will still see American schedules (without fare prices) as well as American fares though the OTA’s.
Kayak released a rather harsh update on their blog this morning.
Kayak.com is disappointed that American Airlines has chosen to misrepresent to loyal users that they terminated their relationship with Kayak.com. The truth is that Kayak.com terminated the relationship because we refused to concede to AA’s demand to not display AA fares available through online travel agencies alongside those from AA.com. Kayak.com became aware of AA’s misstatement after our user feedback system started receiving supportive emails from consumers disappointed with AA’s actions, a number of whom forwarded us the inaccurate email AA sent out last night. We hope that AA will not only agree to again allow consumers to compare AA fares on Kayak.com and SideStep.com, but will refrain from making false statements.
While we are still disappointed by AA’s actions, we remain committed to providing consumers with a comprehensive set of search results and choice of where to purchase. Kayak.com and SideStep.com are continuing to show schedules only (not prices) for American Airlines flights. Consumers are still able to compare AA itineraries along with those from hundreds of leading airlines, and if they wish to find the price or purchase an AA ticket, they can still do so by clicking on the “Info” link and we’ll send them into the Orbitz booking path. We hope American changes its mind and again allows consumers to compare AA fares on Kayak.com and SideStep.com.
We obviously hope these two can work it out. According to Compete, Kayak (and SideStep, their sister site) is responsible for 1.3% of American’s bookings. This doesn’t sound like a smart move for American, particularly because no airline can afford to lose any percentage of their booking revenue right now.
