February 2, 2005

American Airlines may put the squeeze on Internet travel websites, including one in which it was a founding partner, by offering a best price guarantee.

The ailing airline said Tuesday that it would refund the difference in ticket price if customers found the exact American flight for at least $5 less on another travel Web site. American, a division of AMR, will also throw in a $50 voucher for future travel on American flights.

Rob Friedman, managing director for interactive marketing at American, says the company's new plan is "absolutely" intended to lure customers from third-party sites such as Orbitz, a division of travel giant Cendant; Travelocity, a division of Sabre Holdings and Expedia, a division of InterActiveCorp.

American sells only 35% of its tickets directly, through AA.com and telephone sales. It and other major carriers have been trying to encourage customers to buy online by tacking on extra fees for issuing paper tickets and buying a ticket in person.

JetBlue Airways, a carrier born on the Internet, also credits customers the difference of a flight if it can be had cheaper. But there are two important differences. JetBlue doesn't make seats available through third-party sites, so customers are wise to check back with jetblue.com in the days and weeks after a purchase, to see if fares have come down. Also, the company gives a credit toward a future purchase rather than a refund.

It's in the airline's best interest to sell more tickets online. For starters, it's cheaper. Every virtual ticket sold is one less ticket sold by an expensive customer service rep. Further, online customers forfeit information about themselves, giving airlines an easy way to pitch them on fare deals, upgrades and specials.

Friedman says American will continue to do business with third party sites because it wants to maximize its reach, but it will promote AA.com as the best place to buy and fly American.

American was one of five founding companies, along with Northwest, Delta Air Lines, Continental and United of Orbitz in 2000. American and Northwest have since sold their stakes.

Source: Forbes

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