Airlines for Europe (A4E) the campaigning airline association based in Brussels has commissioned a new study, at the forceful urging of budget airline Ryanair, into online travel agents and intermediaries.
Ryanair is already at war with Online Travel Agents (OTAs) including a massive legal battle with dreams-ODIGEO. The report, conducted by economics consultancy Syntesia, outlines how ticket distribution for airlines is shifting as traditional Global Distribution Systems (GDS) lose market share to Online Travel Agents (OTAs) and Meta Search Engines.
This comes after the European Commission designated Booking.com, a leading OTA, as a gatekeeper under the EU’s Digital Markets Act (DMA). The DMA aims to ensure “more choice and freedom for end users, and fair access for business users to gatekeeper services.”
According to A4E, key findings from the study include:
OTA prices for identical itineraries were, on average, nearly 25% higher than booking directly with airlinesConsumers face hidden mark-ups and charges, often falsely attributed to airlinesServices offered for free by airlines, such as SMS updates, are sold by OTAs at a costTwo OTAs control 50% of the European market for OTAsThree companies dominate 95% of the GDS market, with one controlling 60–65% in Western Europe
A4E says the scope of the study covers several types of online intermediaries, with the main priority being OTAs. To achieve sufficient depth, the study analysed a sample of OTAs, which were selected with a view to their high market share (together covering the vast majority of the EU market). This was done by a mystery shopper process in which staff of completed the booking process. It is unclear exactly how many mystery shopping bookings were completed on either the airlines concerned or the OTA. A4E advises that the report was done with the support of Air France-KLM, easyJet, IAG, Lufthansa Group, Ryanair and Volotea – and conducted in spring 2024.
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."
She added, “The recently proposed passenger rights legislation must prevent online freeriding and clearly allocate obligations to each player in the market. Ultimately consumers should emerge the winners, with greater clarity and transparency”
Airlines say that between 10 and 20% of bookings are made on OTA's and most people who book with an OTA don't contact the airline directly to purchase ancillary services, which most carriers rely on to boost base fare levels.
The full report is here.
It is hardly surprising that a report from an airline association that supports the airline industry orders a report which essentially states airlines = good, online travel agents = bad. Whether this report will do any good or the opaque way it was conducted, the small sample number or the way it was financed, will cloud the results remains to be seen.
The information and views set out in this report are those of the authors and does not reflect the official position of A4E, which does not guarantee the accuracy of the data included in this study. Neither A4E nor any person acting on A4E’s behalf may be held responsible for the use which may be made of the information contained therein.