As much as I’m generally all for calling out airlines when they act in an anti-competitive manner, I don’t think this qualifies.
I wasn’t going to write about this, but the PR & crisis management firm for Fareportal has emailed me three times in the past 24 hours to bring this to my attention, so I guess they really want me to cover this. As they wish… 😉 While I’m no lawyer, I’ll gladly share my take.
Fareportal suing JetBlue under antitrust laws
Fareportal, which is an online travel agency (OTA) that owns CheapOair, is suing JetBlue under federal antitrust laws. JetBlue has forced Fareportal to remove flight and pricing information from its websites.
Fareportal claims that this is a scheme by JetBlue to block consumers from being able to comparison shop JetBlue’s fares with those of other airlines. Fareportal has partnerships with over 600 airlines globally, allowing consumers to comparison shop flights.
The company argues that “JetBlue has acted with intent to illegally acquire, enhance, and maintain its monopoly over passenger air travel in the JetBlue Dominant City-Pair markets.” The company believes that JetBlue is trying to increase profits by doing this, and that JetBlue is funding this anti-competitive strategy using COVID-19 relief funds from taxpayers.
As Fareportal wrote in its lawsuit:
“Amidst the turbulence of the global pandemic, JetBlue is quietly pursuing a scheme to make it harder for American consumers to save money when they book air travel. JetBlue’s goal is simple: to make it difficult for consumers to comparison shop when they want to fly.”
Now, it’s important to clarify that JetBlue is refusing Fareportal access to displaying its flights even if the company isn’t getting a commission. The airline simply doesn’t want the OTA to be able to display pricing for its flights.
Why JetBlue wants you to book direct
Airlines have largely come full circle with online travel agencies (OTAs). Back before the internet, airlines had high costs associated with ticketing, given that the entire process of booking an airline ticket was manual, and large commissions were paid.
Then OTAs started in the 1990s, and they were great for consumers, as they gave us the ability to easily compare ticket prices across airlines. Airlines even liked OTAs, since in many cases they lowered distribution costs for airlines compared to the old system.
However, in the past few years we’ve seen a reversal of this, and airlines have gone great lengths to get consumers to book direct:
- Distribution costs are generally lower when consumers book direct through the carrier’s website rather than through an OTA
- Much more importantly to airlines, their ability to customize the experience and generate ancillary revenue is much better when people book direct, whether we’re talking about premium seating options, pre-purchasing checked bags, partnership and loyalty program opportunities, etc.
We’ve seen a countless number of airlines renegotiate their contracts with OTAs, or even cut their agreements altogether. Generally speaking airlines are back in the driver’s seat (or captain’s seat, if you will) when it comes to the terms of these contracts.
Southwest is perhaps best known for not playing nice with OTAs. The carrier’s entire distribution model is built around consumers booking directly via Southwest’s website.
Is there merit to Fareportal’s argument?
JetBlue claims that Fareportal’s allegations are “frivolous and wholly without merit.” The airline says it’s common industry practice for airlines to choose where to sell their products, and that JetBlue is one of several major airlines not selling via Fareportal’s platforms. It’s also pointed out that JetBlue’s fares continue to display with more than 10 OTAs.
While I’m not a lawyer, logically I agree wholeheartedly with JetBlue’s defense, and I have to shake my head at Fareportal’s argument that JetBlue is trying to “illegally acquire” a monopoly here.
A few further thoughts:
- Understandably Fareportal isn’t happy about JetBlue removing flights from its websites, but that’s JetBlue’s prerogative
- As a consumer I absolutely love when airlines make it easy to comparison shop, but I also don’t think that’s something we’re entitled to, especially when the airlines have the option of providing their feed to third parties
- Fareportal is looking out for itself here, and somehow trying to make this about government subsidies, being anti-consumer, etc.
JetBlue may very well regret not even having its fares display through certain OTAs. The airline is hoping that the number of people who will go directly to JetBlue’s website to look up fares will outweigh the amount of business lost as a result of fares not being displayed through certain OTAs. That’s a gamble, but it’s one the airline is entitled to make.
There would be merit to Fareportal’s argument if the airline were somehow doing the work to display JetBlue’s pricing, but the reality is that the airline relies on JetBlue to provide that information.
JetBlue has chosen to withdraw its fares from Fareportal’s websites. In general airlines are doing everything they can to get people to book direct, because it reduces their costs and allows them to maximize revenue opportunities.
While I sure do like comparison shopping, I don’t think we’re entitled to having every airline display fares through all OTAs, even if the airlines aren’t getting a commission. Somehow that seems to be what Fareportal wants, all while arguing that this is an attempt at creating an illegal monopoly.
Is it a consumer unfriendly move on JetBlue’s part? Yes. Is this illegal and an attempt at a monopoly? I’d say no…
Ultimately this lawsuit is probably a negotiating tactic on Fareportal’s website. Whether or not this accomplishes anything remains to be seen.
What do you make of this lawsuit against JetBlue?