On May 20th, the Travel Technology Association (Travel Tech) led a coalition of travel industry stakeholders in publishing an economic impact study outlining the value of independent travel distribution and the price American consumers could pay because of restrictions currently being placed on airfare information transparency by some airlines.
Benefits of Preserving Consumers’ Ability to Compare Airline Fares was authored by Dr. Fiona Scott Morton, a former Deputy Assistant Attorney General for Economic Analysis for the Antitrust Division at the U.S. Department of Justice and current Professor of Economics at the Yale University School of Management.
Preserving the competitive benefits of consumers’ ability to access comparative and transparent information on prices and schedules of major U.S. airlines is more important than ever,” Dr. Fiona Scott Morton.
Ticket price increases: Airline restrictions on access to flight information would result in ticket prices rising by more than 11 percent for leisure and unmanaged business travelers, equivalent to $30 more on average per ticket or an increase of about $120 for a family of four making a trip.
High cost of lack of transparency: The lack of access to transparent, comparable airfare information would be costly: 223 million American leisure and unmanaged business travelers would pay $6.7 billion more in airfares, and it may result in up to 41 million passengers annually choosing not to fly because of higher ticket prices.
Reduced competition: Airlines want consumers to book directly through their own websites and forgo comparison-shopping rather than comparing their airfares more competitively and freely against other providers.
Higher barrier to new and smaller airlines: Comparison-shopping allows smaller airlines and new entrants to compete on a level playing field. Offering low prices can attract consumer attention and sales even when consumers would otherwise have a hard time finding the smaller airline.