AMR vs. ORBITZ

[Hopeful]

http://www.reuters.com/article/idCNN0329535620101104?rpc=44

 

[WorldTraveler]

http://www.reuters.com/article/idCNN0329535620101104?rpc=44

it is ironic that the AAirline that inventory computerized reservations systems including Sabre is now leading the move to essentially dismantle them... but that is one of the changes that must take place....

and for those who think that AMR mgmt only wants to "take it out of the hide" of AA employees, the cost savings if AA is succesful are enormous... of course other airlines will do the same thing if AA succeeds but it nonetheless has the potential to cut AA's costs significantly and it will have no impact on employees.

 

[Hopeful]

it is ironic that the AAirline that inventory computerized reservations systems including Sabre is now leading the move to essentially dismantle them... but that is one of the changes that must take place....

and for those who think that AMR mgmt only wants to "take it out of the hide" of AA employees, the cost savings if AA is succesful are enormous... of course other airlines will do the same thing if AA succeeds but it nonetheless has the potential to cut AA's costs significantly and it will have no impact on employees.

No, but they want MOSTLY the hide of the unions.
As for this Orbitz deal, I am surprised they and Priceline are still popular. Not to mention travel agents.
From your computer you could check each airline individually as well as hotels, tours and rent-a-cars, all without leaving the room. How lazy have we become where we need one stop shopping for airfares and travel arrangements? maybe some people are too busy with work and family...who knows?
Just my opinion.

 

[Bart Starr]

"How lazy have we become where we need one stop shopping for airfares and travel arrangements?"

Not lazy, just efficient. Who really has time to check 4-10 airline web sites for a fare when you can go to Kayak, Travelocity, etc.? Seems like a no brainer to me.

 

[bbrooks1963]

"How lazy have we become where we need one stop shopping for airfares and travel arrangements?"

Not lazy, just efficient. Who really has time to check 4-10 airline web sites for a fare when you can go to Kayak, Travelocity, etc.? Seems like a no brainer to me.

Last I checked the US had 4 airlines people called for travel within the US. How did you get 4-10????

 

[FWAAA]

Last I checked the US had 4 airlines people called for travel within the US. How did you get 4-10????

There's DL, UA/CO, AA, US, WN, B6 and VX - that's seven. Plus Frontier/Midwest/whatever. Maybe that's what Bart was counting.

 

[Frank Szabo]

No, but they want MOSTLY the hide of the unions.
As for this Orbitz deal, I am surprised they and Priceline are still popular. Not to mention travel agents.
From your computer you could check each airline individually as well as hotels, tours and rent-a-cars, all without leaving the room. How lazy have we become where we need one stop shopping for airfares and travel arrangements? maybe some people are too busy with work and family...who knows?
Just my opinion.

Mr. Hopeful:

You had made a comment some time back musing re: how AMR was going to sabotage the balance sheet since they made the obligatory profit in 'X' number of quarters with losses - here, you have your answer.

It seems Orbitz can simply tell AMR where to get off if they're smart and force American to pay an early termination fee (you know Orbitz was smart enough to include that in the contract) and continue raking in bucks from the other airlines and let AMR deal with their reservations themselves.

Byhaps, my scenario isn't practical but it seems so.

 

[BoeingBoy]

Plus AS, Spirit, Allegient, and some small carriers that market under their own brand name. And that's just for travel in the U.S. - add the international carriers if one is traveling internationally. Of course, a person wouldn't necessarily need to check all of them depending on where they wanted to go from/to.

Jim

 

[eolesen]

1) Remember that Orbitz is owned by Travelport, one of the three major GDS companies. AA wants to reduce what they pay to middlemen.

2) It appears AA is hedging their bets on the Google/ITA transaction taking its toll on online travel agencies. OTA's are no longer the only place to get price transparency. Google already shows hotel pricing in searches, and ITA is a leader in fare caching. Why go to Orbitz if you can just Google your intended travel plans?

 

[Hopeful]

"How lazy have we become where we need one stop shopping for airfares and travel arrangements?"

Not lazy, just efficient. Who really has time to check 4-10 airline web sites for a fare when you can go to Kayak, Travelocity, etc.? Seems like a no brainer to me.

Efficient for the busy executive with no time for even lunch...maybe.

But for the casual traveller planning a trip or vaction sitting in his/her comfy chair in front of a pc or laptop with a cup of coffee? I think not!
No one is that busy 24/7.

Whatever happen to all the big hoopla of JETBLUE.COM.....Every airliner has their website stenciled on their engines, winglets and fuselages........You don't see them advertising TRAVELOCITY, ORBITZ, OR PRICELINEon their aircraft!

 

[Bart Starr]

Efficient for the busy executive with no time for even lunch...maybe.

But for the casual traveller planning a trip or vaction sitting in his/her comfy chair in front of a pc or laptop with a cup of coffee? I think not!
No one is that busy 24/7.

"There's DL, UA/CO, AA, US, WN, B6 and VX - that's seven. Plus Frontier/Midwest/whatever. Maybe that's what Bart was counting."

Like I said, 4-10... 🙂

I must be missing something because I do not see any down-side to one-stop shopping. In the case of Kayak they re-direct to an airline web site anyway, if you choose to do so.

 

[Hopeful]

"There's DL, UA/CO, AA, US, WN, B6 and VX - that's seven. Plus Frontier/Midwest/whatever. Maybe that's what Bart was counting."

Like I said, 4-10... 🙂

I must be missing something because I do not see any down-side to one-stop shopping. In the case of Kayak they re-direct to an airline web site anyway, if you choose to do so.

Just my opinion. If AA is paying for the honor of having Orbitz or any other, is it really that necessary? If so, how much of AA's costs are directly related to it?
Advertising is one thing, having someone else do it for you and paying them is another.

 

[BoeingBoy]

Advertising is one thing, having someone else do it for you and paying them is another.

It's not the advertising, it's selling tickets. While I don't know, I'd be willing to bet that the online GDS's sell more AA tickets than AA does. Same for DL, UA, etc. Most potential passengers, who are the "leisure travelers" (although some of them are the business person who only flies occasionally), like the convenience of one-stop shopping for price.

It's almost exactly what the travel agents encountered - the airlines want the online outlets for their tickets but want to pay less for it.

Jim

 

[Hopeful]

It's not the advertising, it's selling tickets. While I don't know, I'd be willing to bet that the online GDS's sell more AA tickets than AA does. Same for DL, UA, etc. Most potential passengers, who are the "leisure travelers" (although some of them are the business person who only flies occasionally), like the convenience of one-stop shopping for price.

It's almost exactly what the travel agents encountered - the airlines want the online outlets for their tickets but want to pay less for it.

Jim

I personally don't know anyone who uses one stop shopping for tickets. Like I said before, people I know usually visit the airline's website. And it is advertising. Companies advertise to sell their product. In this case, tickets. It's all about getting more exposure to the flying public. But unless your the airline who comes up first as the lowest fare, it's a big waste of money.

 

[BoeingBoy]

Whether you know anyone that uses the GDS's or not, they wouldn't exist if people didn't book airline tickets, hotel rooms, and rental cars through them. I guess in a sense advertising and marketing overlap a little - people see a produce for sale and decide to buy it - the logic behind having candy bars or Hollywood gossip magazines at the check-out lanes at grocery stores. Coca-Cola could sell their products only at the franchisee's place of business, but they would only sell a tiny fraction of what they actually do sell no matter how much they advertised. They increase sales by backing up the advertising with availability at a wide array of locations.

The distinction is that advertising normally is used to create a desire to buy the product without actually selling the product while marketing is normally making a product available for purchase (especially at places people often shop for that type of product). Or, as Merriam-Webster defines them:

advertising - the action of calling something to the attention of the public especially by paid announcements.

marketing - the act or process of selling or purchasing a product.

Obviously there are distinctions between airline seats and Coca-Cola. One can buy a Coke and consume it wherever and whenever they want. It's impossible to book an AA seat and decide to consume it by flying from AVL to CLT. Or a US seat and consume it by flying from DFW to NRT. That's where advertising and marketing really overlap. Few people know every place that AA, UA, or whoever flies from/to. So marketing the availability of AA to take a person from Stumpwater to Dead Tree on the AA website and GDS's is a way to advertise a specific route as well as market it.

Jim