JetBlue Airways’ decision to sever ties with a dozen lower-yield online travel agencies is part of a broader strategy to drive customers to its website, Marty St. George, executive vice president, commercial and planning, said.
It’s an example of how the carrier can lower its costs – jetblue.com is its least expensive channel, he said — and better support low fares on the site.
Jetblue.com also is the airline’s “best merchandise channel,” St. George said during the carrier’s third-quarter earnings call.
When it announced its break with the OTAs, JetBlue said the distribution cost structure through third-party channels makes it challenging to offer a full range of fares.
Neverthless, JetBlue will continue to work with “select third-party channels.”
The carrier stressed that customers who book direct receive benefits such as access to promotions and sales that may not be available on OTAs. They also can select their seats and receive triple points in the TrueBlue frequent flyer program.
JetBlue says making changes and cancellations through its customer service channels is faster and easier when customers book direct.
The affected OTAs are SmartFares, MyFlightSearch, VacationExpress, FlyFar, FlightNetwork, Vayama, WhatsCheaper, Vegas.com, JetsetVacations, CheapFlightsFares, QuickTravels and Kiwi.
JetBlue is not the first airline to adopt a strategy of limiting its involvement with OTAs.
Delta began the process of trimming its roster of OTAs in 2011, dropping 21 by the middle of the year.
It raised a ruckus again when in 2015 it began denying access to meta search engines. (Some of those relationships have since been repaired.)
But Delta had its own motives: While JetBlue has positioned its decision as a distribution cost-cutting move, Delta’s seemed to be about image as much as economics.
For example, it demonstrated a decided aversion to the word “cheap.”
In defending Delta’s strategy, Tim Mapes, senior vice president of marketing, said, “We have no intention of distributing in places that we don’t think are brand-accretive. Delta needs to have a lot of shelf space, but it has to be quality shelf space.”
Other carriers take issue with OTA displays. Bradley D. Tilden, chief executive officer of Alaska Air Group, says some sites display ultra-low-cost carriers side by side with Alaska, which has earned a reputation for quality service.
“I think they put these products on the shelf — which, in general, people don’t like a lot — right next to our product, and consumers may not know that there is an actual difference,” Tilden said during the airline’s earnings call.
“We’ve been taking our OTA partners to task over that, and I think they actually need to help do a better job to inform customers. People at the same price would prefer our products generally so they have more stuff included.”
Shane Tackett, Alaska’s senior vice president of revenue management and e-commerce, added that the OTA channel is “still a large enough distributor of tickets that it probably doesn’t make sense for us to just walk away from it. And we’re more interested in optimizing the channel and working with our partners. And Expedia is a very large one. They’re right up the street from us.”