JetBlue faces accusations of excluding online travel agencies to “illegally acquire, enhance, and maintain its monopoly over passenger air travel” in markets where it holds a dominant share. Fareportal, parent of CheapOair, filed the suit this week after the carrier cut off access for Fareportal to sell the carrier’s fares.
JetBlue’s goal is simple: to make it difficult for consumers to comparison shop when they want to fly.– Fareportal lawsuit
For its part, the airline says “The allegations in the complaint filed by Fareportal are frivolous and wholly without merit. It is common industry practice for airlines to choose where to sell their products. We are currently one of several major airlines not selling via Fareportal’s platforms.”
JetBlue also points out that it still distributes its product on more than 10 other aggregator and OTA sites. But this is not the first time the carrier has chosen to cut of an OTA.
In October 2017 the carrier removed its offerings from a dozen other, smaller OTAs. It was described as “the first phase of a new online distribution strategy” with a focus on sales from its own website and partners willing to integrate directly with JetBlue’s distribution platform. At the time the company cited high distribution costs and lower yielding fares from those channels as the driving factors. In effect the conversions through those sites cost too much to service, eroding the value of being listed.
Fareportal counters that claim, however, noting that it offered to sell JetBlue tickets using the direct, NDC integration that allows for the ancillary up-sells and respects the fare families JetBlue offers without charging JetBlue any fees for distribution. JetBlue still terminated the agreement.
Fareportal also tries to dispel the theory that its customers are only buying the cheapest fares. It cites 2019 results of $170 million in fare revenue (of $8 billion) for 520,000 (of 42.7 million) passengers, roughly $327 per person. JetBlue’s annual report says its average fare was $182.23. It is unclear how the split between one-way and return tickets affects those numbers.
Stifling competition or improving the experience?
Whether it is good news for passengers is less clear. Reducing the ability to comparison shop fares is, generally speaking, bad for consumers. But some airlines have been doing it far longer. Southwest Airlines prides itself on not including its fares in the OTAs or other consumer-facing search engines.
And while airlines historically have done a better job of merchandizing the products, particularly with the ancillary up-sell options, Fareportal committed to offering a much broader range of JetBlue options via its direct NDC integration. Making it easier for passengers to compare the real price of a ticket – once fees for seat assignment, bags, and other bits are included – is definitely an improvement for consumers, though it also does not exist today and there is no indication that CheapOair was going to deliver that any time soon.
Fareportal also claims that JetBlue intends to cut off other, larger OTAs later this year, though it does not provide much in the way of details to support those assertions.
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