October 20, 2017

JetBlue drops 12 OTAs in bid to cut costs

JetBlue Airways has withdrawn its flights from a dozen online travel sites in the first phase of a broader effort to trim $20 million from its ticket-selling expenses.

JetBlue is remaining with larger agencies including Priceline.com and Expedia Inc., along with Expedia’s Travelocity.com and Orbitz.com units. The airline favors sites like Kayak Software Corp.’s Kayak.com where consumers can comparison shop for prices and schedules, but then are redirected to the website of the selected airline to book their travel.

The changes are the latest skirmish between airlines and online travel agencies that sell tickets based on fare and flight data provided by global distribution systems, or GDS. Carriers in general pay five-times more for a typical booking made through such travel sites than on their own website, said Henry Harteveldt, founder of Atmosphere Research Group. Airlines are trying to get more control over the information and the so-called distribution costs involved.

“It tends to be the lowest-revenue customers coming through in a market where we pay the same distribution costs for a customer paying $39 as one paying $339,” Marty St. George, JetBlue’s executive vice president for commercial and planning, said in an interview. “Distributing really low fares through these channels is very, very expensive for us.”

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