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, 
in 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 Airfare.com 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.
14 comments on “American Pins Kayak In the Corner”
I’ve never used these type of sites, but do wonder how accurate can they be.
David – They can be very accurate, but it all depends on how good the connection is between the systems. Kayak caches data, so you might find more inconsistencies with them than someone who doesn’t.
Yet another reason why I hate American Airlines.
I usually use kayak.com to browse fares, but I check with other sites, including airlines’ own. I’d say this is a silly argument started by AA.
Not sure why this would make you hate AA…seems to me they are just protecting how their product is sold. Do you hate Apple because you can’t buy a MacBook at WalMart?
I always end up doing my shopping on these types of sites (mobissimo, traveldealzone, sidestep, kayak) but end up buying direct to save on booking fees, etc. Why would anyone would ever buy an airline ticket on Expedia/Travelocity/Orbitz when they all charge a booking fee?
Like we needed another reason to hate AA. I live in Fort Worth and I can’t stand them. They make decisions just to spite other airlines (especially WN) even when they know and admit to the media they will lose money doing it. They tried charging me the bag fee for my wheelchair, and now this. I honestly hope they, the company, go down in flames.
About Mr. Hafner’s comment on OTAs:
1) Mobissimo & Farechase are both older meta-search engines than Kayak and they have always had OTAs listed on their website including Orbitz/Cheaptickets. Only this Spring has Mobissimo stopped displaying Cheapticket’s prices and after the Kayak-AA conflict three weeks ago, Orbitz has stopped showing up on Mobissimo’s international search results.
2) it’s not difficult at all to see that some of the same investors that poured so much money into Kayak ($200+ million total) also stand behind ITA Software which has both Orbitz & Cheaptickets as their customers (as well as Kayak, of course). So maybe, just maybe, the question here is not about Kayak preferring Orbitz over AA or Kayak being pro-consumer (give me a break, it’s all about business here), it’s about Kayak having its investors’ interests hurt and simply doing what its investors tell it to do.
Dennis, your analogy is incorrect. you can use sites like mysimon.com to compare prices of Mac equipment, even if Mac restricts which vendors sell ipods, etc. (though I’m pretty sure you can buy ipods at Walmart, just not full computers.) if they want to “protect” how their product is sold, then they need to withdraw from working with OTA. kayak simply reports if a third party vendor is cheaper; it doesn’t make the prices that way. if a fare can be purchased for AA that is cheaper than their own website, maybe they need to join EVERY OTHER AIRLINE in having a price guarantee…?
Not really Benji, it might be worth a look around the interwebs. American Airlines does have a low-price guarantee – take a look on AA.com.
When a company (including airlines) sells their product through a 3rd party, they normally do keep some control over what channels and how their product is sold. This is often done to avoid taking away direct sales (look at apple, dell, etc. does).
The pricing from a online travel agency like Orbitz should never be cheaper (actually more expensive), it just costs the airline more in commissions.
Dennis – I agree, but many airlines have promised to have the lowest fare available for online travel agents in exchange for lower costs. So you will rarely find it cheaper on the airline site, and in US Airways’ case, it’s more expensive. US Airways rationale is that you’re paying a booking fee on the online travel agents, so they can charge more and still be competitive with the OTAs.
While I wouldn’t typically book just a flight on an OTA, sometimes the savings when booking an entire vacation are too hard to pass up. I’m going to CUN in 2 weeks (CO from SYR via EWR) and to stay at my resort of choice, in the room level I chose, it would have been an additional 33% to book through CO, and to book everything seperately through individual websites (CO and Excellence Resorts) it would have made this recent college grad broke.
RE: 11:10 AM – Don’t they (AA) actually HAVE a price guarantee? Anyway, this is stupid. Everytime I’ve ever purchased a ticket from AA.com, it has been because Kayak showed them having the lowest fare, so I went to AA.com and bought the fare. Isn’t this GOOD for American? I have ZERO loyalty to any airline, and would never start a search for airfare by going straight to AA.com. I even forgot AA.com was out of Kayak last time I bought a ticket, so I never even saw what American’s fare was. Another case of a big, traditional analog company suing a tech company whose particular innovations make them nervous, rather than embracing what is an inevitable shift and making the best of it. Whatever, AA is so awful anyway, I’d rather walk.
Further to the above, I realize that now the issue has extended to including OTA fares for AA as well. But I think Dennis is right. I very rarely find cheaper fares from an OTA than from the airline itself (and I have had a couple of HORRIBLE experiences with Orbitz not properly communicating ticket numbers to United), so I book from airlines websites almost exclusively. What am I missing…how can AA.com have a low fare guarantee and simultaneously be worried about Kayak sending their fare traffic to Orbitz?
Tom – I’m not completely sure on this, but I think the issue might be how hard Kayak is hitting Orbitz. I need to make some assumptions here, but someone can correct me if they know better. Every time someone comes to Kayak, they have to hit American or an intermediary to get the flight availability information. Then, they also hit Orbitz getting flight information for all airlines including AA. This double-hitting of American’s inventory through different sources can be costly to the airline and seems unnecessary from their standpoint. At least, that’s my guess.