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American vs. Orbitz: Neither really wants to clear the air
Online agencies typically show "base" airfares, minus any taxes and optional fees. They allow travelers to compare prices between airlines, but those comparisons have become increasingly difficult to make in the past two years, as air carriers have removed once-included items from the ticket price, such as checking a bag or making a seat reservation. Generally, airlines have refused to disclose these fees to travel agents in a meaningful and comprehensive way.
By withholding the fee information and waiting until the end of the reservation to disclose it, airlines stand to make more money because their tickets appear cheaper, and they can pocket all the profits from the extra fees that they charge later. Travel agencies want access to the information, and they say that they want to disclose it earlier so that they can keep their customers from being surprised by these fees at the airport. Plus, they hope to sell you the extras up front, potentially earning them a bonus or a commission.
Orbitz has kept a low profile in recent days, saying only that it is still trying to iron out its differences with American. "We have not closed that door," says spokesman Brian Hoyt.
Not so with American Airlines. Cory Garner, the director of distribution strategy at the carrier, spoke with me at length, saying that one reason the airline is moving to Direct Connect is so that it can show a full airfare.
"We want the customer to know what the total cost of the trip is," he says.
Garner said Direct Connect wouldn't make it more difficult for travel agencies or consumers to shop for and compare American's services with other airlines.
To get an idea of what a future Direct Connect reservation might look like, Garner suggested that I take a look at American's Web site, AA.com.
But American's vision of transparency seems different from what the average consumer might be looking for. The Web site currently doesn't offer you the choice to build a fare that includes a checked bag or a meal - instead, it reveals the fees after you've chosen your flight.
The only fee currently offered upfront is the new "Boarding and Flexibility Package," which allows you to board a flight early and offers a discount on change fees, if your flight plans change. Garner assured me that the airline was working on making all fees available right off the bat.
Jim Osborne, a vice president at the travel agency consortium Virtuoso, is skeptical of American's claims that fare comparisons will be just as easy under Direct Connect. "The proposed fragmentation that could come if each airline required you to book directly with the airline would require the agency community to drastically change the way they do business," he says. "Research would take much longer and easy comparison shopping would no longer exist."
That would be bad news for passengers, according to Andrew Weinstein, director of Open Allies for Airfare Transparency, a coalition of travel companies pushing for access to airlines fares and fees. "By trying to turn back the clock to an era of closed systems and hidden pricing, airlines risk alienating their customers and closing off the very distribution channels they need in order to succeed," he says.
But Swelbar, whose center receives funding from the airline industry, says that the change is inevitable and will save airlines money. "American's actions are an extension of the airline industry's efforts to restructure the business by cutting costs in the short-term and taking increasing ownership of their respective inventories for the long-term," he told me. "I think it is safe to say that airlines know their product better than some third-party vendor."