How powerful is the internet? More powerful than you think.
The internet, ladies and gentlemen, has managed to move old dinosaurs such as traditional US and European airlines, and make their market arena – god forbid: efficient. At least in some cases.
We like to divide the flight reservations scene to three arenas:
Local US
Local European
All the rest.
The most outstanding example is actually coming from the domestic US market.
See this example: on Friday we made a search for a return flight from Salt Lake City to New York in August. Both Delta and Continental offered numerous flight options for $289, the lowest in the market. When we looked again in Saturday, we saw that Delta made a differentiation act and lowered the price for the same flight for $279. Now it’s the price leader for this trip, with a small but noted gap from its rival.
Both prices were found on their homepages, while the agencies, Orbitz, Expedia and Travelocity, could only offer a price starting in $284 for Delta’s flight and $294 for Continental’s.
Small money, true – but this is what it tells us: 1. Elastic price offering. 2. Lowest prices offered by the flight source= less aggregators in the way.
What happens in Europe? Like always in Europe, diversification rules and market efficiency is not the most dominant factor. But low cost airlines did change some things in the market. First, most popular routes now offer a one way pricing. Then, there is a long list of airlines, from Ryanair and Easyjet to any low cost carrier you know (Think of Vueling, Wizzair, Transavia and the list goes on, see for yourself) – That offers the lowest prices in its homepage, 100% of the time, never fails.
These facts drove most European traditional carriers to react. It takes quite some chances until one could find an Alitalia or British Airways flight priced better at an agency site then in the airline website. Though less rare with Iberia, KLM and Air France – they are also heading in the right direction.
Small steps for consumer, great news for the travel search engines 
But, not everything in the market is perfectly efficient.
Where the international arena lays we encounter a huge set of routes, airlines and inefficiencies.
In the international arena you can:
- Never know that you have found the best price. – Never trust an airline website to stand behind the ‘low prices guarantee’ promise. – Count on one hand competitive routes (London – LA/NYC, NYC-Paris, NYC-Venice). – But count numerous routes with little or no competition (Anything to Australia, Israel, India, China, Croatia, Thailand and the list goes on). – Pay for a one way ticket more than you pay for a return flight, and not even know that…
And the list goes on.
Bottom line:
Online travel reservation market is still far from mature or efficient, but at least we can see some signs it might be getting there one day…
