A new study for Airlines for Europe (A4E) accuses some third-party airline ticket websites of misleading, abusive and/or unauthorised practices.
Conducted by economics consultancy Syntesia, the research included written submissions from airlines, interviews, and a mystery shopper exercise, as well as desk analysis.
OTA market dominance
The findings reveal what A4E calls an “alarming” picture of a shifting playing field, with traditional distribution systems losing ground to a highly concentrated flock of Online Travel Agents (OTAs) and search engines. That stable is dominated by “two players – Etraveli and Edreams-Odigeo, plus their subsidiaries and cooperation partners such as Booking” who, the study highlights, control over half of the EU market.
That market dominance has already been acknowledged by the European Commission which recently designated Booking.com as a “gatekeeper” company under the European Union’s Digital Markets Act (DMA). A firm is consider a gatekeeper if it is an important keyholder for consumer access, has a significant impact on the internal market, and enjoys “an entrenched and durable position.”
On the report’s publication, Ourania Georgoutsakou, Managing Director of A4E, said, “The EU’s Single Market has unlocked unprecedented choice and transformed air travel for European consumers. This success is built on fairness and a level playing field. Our report shows that this is under threat from a highly concentrated digital ticket distribution market, where OTAs do not face the same consumer obligations as airlines.”
25% price mark ups plus added charges
But their high market share and control over consumer choice, the A4E study says, are not the only problems with OTAs, who are accused in the report of “online freeriding”. Issues includes the marking-up of prices, the study found, as well as charging for services that airlines offer for free, such as SMS updates, and then, even worse, blaming the additional costs on the airlines themselves.
Providing some balance, the study recognised that “OTAs have the potential to add value for consumers by acting as a one-stop shop for travel-related services and complementing airlines’ offers.” Particularly for customers looking for package holidays, activities and experiences, and ways of bundling them together, or for those with “complicated travel plans” or keen to compare prices.
But the researchers questioned the actual value proposition of that comparison process, as they found OTA prices for identical itineraries were, on average, nearly 25% higher than booking directly with airlines.
Customers misled and abused
They said the OTAs get away with this thanks to “a range of untransparent, misleading, abusive and (in some cases) unauthorised practices. These permeate the entire customer journey, from initial search and comparison, through finalisation of the offer and booking, to the lead up to travel, the travel itself and its aftermath.”
Calling for greater transparency and clearer role definitions within the market, Georgoutsakou underlines that the Digital Market Act’s “passenger rights legislation must prevent online freeriding and clearly allocate obligations to each player in the market. Ultimately consumers should emerge the winners.”
