Delta Air Line's withdrawal of its schedules and fares from online travel agencies CheapOair, BookIt.com and OneTravel a couple of weeks ago may be part of a fundamental shift in the airline's distribution strategy and just the opening round.
Which leads to the question -- are other online travel agencies on Delta's hit list?
BookIt.com CEO Bud Finlaw describes the reasoning Delta's top distribution official articulated for the pullout when the airline contacted BookIt.com Dec. 15 and gave the online travel agency just two days to remove Delta's schedules and fares from the website.
"We got a Christmas card from Delta on the Monday and a termination notice on Wednesday," Finlaw says. "The phone call on Wednesday afternoon was literally our first hint."
Chris Phillips, Delta's director of distribution planning, told BookIt.com on Dec. 15 that Delta has made a fundamental decision after a long analysis to change its online distribution strategy because of confusion in the market over the way its schedules and fares are displayed by online travel agencies, Finlaw recalls.
Phillips pointed to "the product not showing up consistently, [not] showing schedules properly, different display types and fare matrices," Finlaw says, adding that the confusion was impacting Delta.com.
"Again, all allusions were [made by Delta] to a wide implementation, affecting all online distribution," Finlaw says. "The tone of the conversation was that this was not a move against BookIt.com, but was going to be a complete revamping of Delta and its distribution strategy."
Finlaw says Delta's reasoning as it related to BookIt.com was curious because the online travel agency predominantly used Delta inventory as part of vacation packages and didn't display logos and fares.
Asked to elaborate on Delta's distribution philosophy and whether a fundamental policy change indeed is under way, a Delta spokesman said the airline has only removed its flights from BookIt.com, CheapOair and OneTravel and declined to comment beyond its statements a couple of weeks ago.
Meanwhile, the airline's decision wasn't part of a contract dispute between Delta and BookIt.com, Finlaw says, because BookIt.com accessed Delta inventory through its Travelport relationship and not through a direct Delta contract.
Delta apparently has the option to cut off online travel agencies accessing the airline through Travelport.
BookIt.com is the largest of the "second tier" OTAs in Travelport GDS, Finlaw says, so it BookIt.com might be an effective test case of Delta's new distribution strategy, Finlaw says.
"We assume this was a test, a shot across the bow," Finlaw says.
When Delta pulled the plug on BookIt.com, it just impacted BookIt.com's online distribution. Consumers calling the BookIt.com call center can still book Delta flights, Finlaw says, explaining the airline kept that option open.
So, how has the removal of Delta's online fare displays impacted BookIt.com?
Delta had been responsible for 21.5% of the online travel agency's flight bookings before the withdrawal and chipped in just 2.7% of flight bookings over the last seven days, Finlaw says.
But, at least some of those lost flight bookings have shifted to other carriers, with American Airlines' share of bookings up more than two percentage points to 17.6% and Continental's climbing three percentage points to 15%, for example, he adds.
Package sales have increased with customers using carriers other than Delta, Finlaw says.
So, Delta's exit "doesn't feel like it's been detrimental in one sense," Finlaw says, although he adds that it has been a negative because BookIt.com wants to give customers a full suite of options.
Finlaw says he was surprised a couple of weeks ago when Glen Hauenstein, Delta’s executive vice president of network planning, revenue management and marketing, speaking at an investor event, talked of the airline's exodus from the three OTAs and noted that the Delta is trying to create a unique customer experience on Delta.com akin to the Apple store experience. Hauenstein had contrasted a differentiated Apple store visit to the more generic Best Buy experience.
Finlaw says the analogy doesn't work because Delta doesn't have a unique product or cult following, as Apple does.
Says Finlaw: "Delta is more like a Dell or any of the other Windows machines."