American Pins Kayak In the Corner

This fight between Kayak and American has become downright ugly. Now we have allegations and lawsuits flying back and forth as both sides stick firmly to their stances. Kayak isn’t exactly in an enviable place, and the user experience is suffering greatly. What exactly is going on here, and will it ever get resolved?

American has decided to step this up in a big way by suing Kayak. You can find the link to the suit here, but it’s basically saying that Kayak needs to stop using American’s fare and availability info immediately, regardless of where it’s coming from. Since Kayak signed an agreement with American originally, American says that once it was terminated they forfeited the right to use their information, even if Orbitz is the one providing it.

Apparently, Kayak seems to think there may be a case here because they have, 08_08_14 aaonkayakin fact, stopped showing AA’s flights altogether. Now if you go to Kayak, you’ll see that no American results are returned. Instead, there’s a link in the filters on the side that you can click for “info.” This leads you to a message that says:

We’re sorry, but we are not currently displaying American Airlines’ fares. We hope to resolve this issue soon. In the meantime, if you are interested in comparing their fares or booking a flight on American Airlines, you can do so by clicking on any of the links below for other travel websites

I’m sure you won’t be surprised to know that the “links below” are to Orbitz and CheapTickets. And yes, it does say they’re “sponsored” links.

I have to say, this is a pretty crappy experience. Without availability info from one of the largest airlines, this isn’t exactly a helpful site. So now Kayak is stuck with the very difficult position of deciding which is better for their customers – no online travel agents displaying American’s flights or no American flights at all?

Of course, if the decision were that basic, it would be a no-brainer. But it’s not that easy. The second American is successful in getting Kayak to stop showing online travel agents on their flights, every other airline will line up and make them do the same thing. Kayak has said that they “are dedicated to providing a comprehensive and objective display to our users. We’re unwilling to amend this pro-consumer philosophy that is the core of our business by suppressing results based on a partner’s request.”

Really? Are they actually unwilling to amend this philosophy? I’d say that’s clearly not true, from past behavior. For domestic flights, Orbitz and CheapTickets (owned by the same company) are the exclusive providers of online travel agent fares. Sounds against their pro-consumer philosophy, right? Well, I contacted Kayak and received this quote from CEO Steve Hafner:

We did the [Orbitz/CheapTickets] deal at a different time in our business, when we had no traffic and no leverage. At that time, OTAs were not interested in participating in meta-search. Times have changed and we would not do the same deal again. In fact, in Europe we preserved flexibility and have multiple agencies coming on board.

They wouldn’t tell me when it was signed or when it expires, but I can use some of my own experience to put this in perspective. We never had any leverage at PriceGrabber Travel, and we did have Orbitz on the site. If you used the site, you likely saw other online travel agents like OneTravel and popping up with fares that were often better than Orbitz, especially in the international arena. So clearly there wasn’t an exclusive deal in place. We closed up shop in the spring of 2007 and Kayak had plenty of leverage long before that point. So if they signed this deal when they had no traffic, this happened a long, long time ago. That seems unlikely since we never had that issue. Something’s fishy here.

The bottom line is that Kayak has a pretty poor user experience right now. We see them not actually showing all the online travel agent options out there because they have exclusivity with Orbitz/CheapTickets, but they aren’t willing to budge on the American deal in the name of the consumer. So now, the consumer has a relatively poor experience since they can’t display American’s fares.

I’d say Kayak is in a tough spot, and something is going to have to give. Kayak tells me that discussions with American to fix this problem are continuing. I’m just not sure how they can get out of this predicament without having to make some changes they aren’t going to like.

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