Delta Drops Three OTAs, Wants 'Apple Store' Approach

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Tnooz' Dennis Schall reports American isn't the only major carrier dropping online travel agencies these days—Delta is in on the game, too. Schall writes, "Delta removed its flights Dec. 17 from second-tier—but still important—online travel agencies, CheapOair, BookIt.com and OneTravel."

But unlike the American-Orbitz dustup, in which American is trying to cut costs by using its own fare distribution system, Delta claims its motivations are more marketing-centric. Delta wants to take what it calls an "Apple store" approach to selling its fares, focusing on a unique delta.com experience while allowing a select few other retailers to offer its flights.

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"You are purchasing our product [and] the most robust experience you should have in that transaction should theoretically be our website," Glen Hauenstein, Delta’s executive VP of network planning, told an investor conference, according to Tnooz. "We look at it very much like an Apple store versus Best Buy. You can buy components or Apple products at both. Your experience in an Apple store is obviously quite different than it is at a Best Buy store. That model is what we think about when we think about Delta.com."

A more apt comparison might be Southwest, which only sells its fares at Southwest.com. That exclusivity has not hurt its business in any meaningful way, and Southwest is as committed as ever to maintaining its OTA blackout. The airline is actually in the midst of a marketing campaign to reinforce the fact that its fares are only available on its website. Delta, and other airlines, no doubt look at Southwest and wonder, "could we do that?"

Costs certainly play a role as well. The sites Delta abandoned are "second-tier" but by no means insignificant. Schall notes that Cheapoair is the sixth-most-visited travel site on the Web, behind the major OTAs but ahead of Hotwire, Kayak, and Bing Travel. Pulling its fares sends a signal to the larger OTAs that Delta may be looking to cut costs, and is willing to take bold action to do so.

Cheapoair, for its part, isn't saying much. An executive told Schall, "We've had a 10-plus-year partnership with Delta and we fully expect to renew our contract with Delta in 2011.  This is our only comment at this time."

For the consumer, little will change as a direct result of Delta's move. Delta's fares are still available on plenty of OTAs, including the major ones, and will be for the foreseeable future. Even if Delta does concentrate its business on delta.com and a select few third-party sites, consumers should have no trouble finding its fares.

The more crucial question, however, is what happens if other airlines follow Delta and American's lead?

Let's cross that bridge when we get to it.

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