Today Forrester’s Henry Hartevledt, everyone’s favorite travel analyst appeared on Fox Business to talk about the dispute between American Airlines and Orbitz. It doesn’t look like Henry thinks this will turn out well for AA.
A few nuggets from the video:
- Orbitz delivers $800M in sales for American each year. That’s a lot of money for American, yet only represents 5% of Orbitz’s business. Harteveldt believes American will feel some pain in the short term.
- While American makes an economic case as a primary driver for their decision to pull flights from Orbitz, Henry states that Orbitz is actually one of American’s cheapest third-party distributors.
- When asked whether American can pull off a direct model like Southwest: “Unlike Southwest, American is not really a distinctive airline…American doesn’t have any leading performance statistics such as on-time or anything to make people seek them out. I don’t think American will be successful in replicating Southwest’s direct distribution approach”
- Forrester research shows that half the people who shop on a travel agency site actually purchase their tickets on the airline’s own site.
- Travelport’s chance at an IPO are “scuttled, at least for the short term.”