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Airline bulletin provides late breaking information on airlines, fares, and travel. Airtran airways, one of the largest low cost airlines in the us and one that has managed to keep costs contained announced on friday that it was dumping the worldspan global distribution system, which is used on one of the most popular travel sites, expedia.
Airtran is addressing a source of high costs that airlines have been targeting for years, which is distribution costs. Many airlines started several years ago by reducing or ending commissions to travel agents.
Orbitz was created by several airlines as a way to offer some pricing control to consumers and to compete with the new expedia and travelocity. But now, with the new environment with high fuel prices and more intense competition, airlines are trying to find further ways to cut costs in non fuel, non labor areas.
Extreme low cost airlines in europe have reverted to accepting bookings almost entirely on line. Ryanair, Airtran, and Jetblue but not southwest use a booking system on their websites called open skies. This fact will prevent airlines in the us from generating higher rates of on line booking.
But more airlines, including Airtran, alaska, frontier, and spirit, will probably cut back on gds systems. However, on line bookings are not the only ways for airlines to cut costs at this stage. Customers have already seen other methods being implemented by Airtran and other airlines, but more on that later.
Fewer seats from nyc to florida or california are needed, not more. The facts are that there are just too many low fare airlines out there especially in certain markets. The winners in all this will be the airlines who can merge to lower their overall costs and find new, smaller markets to operate in. Although midwest airlines is not considered a low fare airline, it is considered an ideal partner for Airtran.
The important thing to remember is that not all low fare airlines are low cost. Certainly independence air or midwest airlines have costs down anywhere near the levels that jetblue has them. If Independence air were to merge with frontier, and serious operational changes weren't made, the airline would fail easily.
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