In other airline, hotel and travel industry news this week…

• United Airlines has signed with Next IT to create a virtual assistant on United.com, similar to Continental’s “Ask Alex.” “Next IT will provide a natural, or every-day, language solution to create an exceptional customer experience for travelers using the website.” If you’re unfamiliar with “Ask Alex,” it’s basically an interactive help tool where you ask a question and receive an audible and text answer back.
• Today, the first Continental Airlines aircraft equipped with Economy Plus is flying. The Boeing 767-400 also features the new flatbed BusinessFirst seats, on-demand touchscreen seat-back monitors in coach and United’s popular Channel 9 featuring live air traffic control communications.
• American Eagle Airlines was fined $900,000 by the Department of Transportation this week for exceeding the three-hour tarmac rule. 15 flights were impacted at Chicago O’Hare on May 29^th with a total of 608 passengers. The carrier has 30 days to pay $650,000 and the remaining $250,000 will be credited to those customers affected in the form of refunds, vouchers and frequent flyer bonus miles. If there’s money leftover, it will be used for future tarmac delays exceeding three hours.
• A Congressional report blasted the TSA this week calling the agency “bloated” and “plagued by significant problems.” Today marks the 10^th anniversary of its creation and I like to call it the Thousands Standing Around agency. Among the report’s findings: too many employees, 25,000 security breaches and expensive & inadequate technology.
• Hawaiian Airlines is pushing further East here in the contiguous 48-States and will begin daily service between Honolulu and New York’s Kennedy airport on June 4, 2012. CEO Mark Dunkerley said, “New York is an important part of our growth strategy. Adding service to the largest market in the Eastern U.S., Hawaii’s second largest tourism market, was a logical step.”
• Boeing received the largest-ever commercial airplane order from Indonesian carrier Lion Air for 230 aircraft. This tops the manufacturer’s previous record from just a week ago at the Dubai Airshow when Emirates placed an order for 50 Boeing 777 jets.
• Google is reported to soon bring international destinations to its underwhelming Flight Search tool. I haven’t been back to play around with the tool since my review of it, nor do I really have any desire to return until I hear reports of “something amazing.”
• Online Travel Agency Travelocity has changed the game of hotel reviews with a new Q&A-type function. Specific, heavily moderated questions appear, such as, “Is there a parking charge?” A previous guest replied, “No.” From the article, “Travelocity hopes the new question and answer formal will help hotel bookers in their trip-planning activities and improve the user experience.”
• A recent J.D. Power and Associates car rental study heralds ACE Rent-A-Car as taking the top spot for customer service. I’ve never heard of them, but they beat out the common ones down the list in order of Enterprise, National, Hertz, Alamo, Budget, Dollar and Avis. ACE has about 200 rental facilities worldwide, all independently owned and operated.

In other airline, hotel and travel industry news this week…

[Edited last minute to include:] Qantas CEO Alan Joyce has taken severe action and cancelled all flights in response to continued pressure by three union groups at the airline. He states, ”They are trashing our strategy and our brand. They are deliberately destabilising the company and there is no end in sight.” Paging Prime Minister Julia Gillard… would Julia Gillard please pick up the nearest white courtesy phone.

• All the major air carriers released their third quarter 2011 financial results in the last week. Most missed analyst expectations and all cited the approximate 40% increase in jet fuel prices from the previous year’s quarter as the main reason. Starting with the winners, United Airlines – Continental Airlines posted a combined net income of $653 million, down 23% from 2010, Delta Air Lines posted a profit of $549 million, up from $366 million in 2010 and US Airways netted $95 million, down from $243 million in 2010. Not unsurprising, American Airlines posted a $162 million loss this past quarter compared to a $143 million profit in 2010.
• The Chicago Tribune recently interviewed the founder of AirplaneFood.net, Luis Ramirez, after the reporter read an announcement that American Airlines will be working with two top chefs to provide in-flight meals on some flights. In my opinion, first class meals today are the free coach meals of 1990 and it’s a favorite gripe among travelers. Not surprisingly, Ramirez’s top three carriers for meals are foreign, namely Singapore Airlines, Cathay Pacific and Emirates. His bottom three are United Airlines, US Airways and Alitalia. I particularly like his quote about United’s meals: “Uninspired, unattractive, predictable, and most importantly, lacks minimum quality.”
• Even though domestic airlines claim they’re not seeing a drop in demand in business travelers, IATA – the International Air Transport Association – points to slowing growth for premium traffic. The association reports international premium traffic growth in August slowed to 2.3%, down sharply from July’s 7.5% rate. Routes within North America declined, actually, and were down 13.2%.
• When Google Flight Search launched last month it only offered links to book a ticket on the websites of the carriers it featured. It seems they’ve had a change of heart and now show the ability to “try this search” on the major Online Travel Agency (OTA) websites. I’m sure they had a bit of pressure from the OTAs and a Google spokesperson stated, “While this is just a start, we look forward to expanding our advertising efforts with partners and to continue experimenting with different formats, placements and targeting capabilities.” I honestly haven’t been back since I gave it a rather scathing review.
• Flight diversions make for a stressful situation for passengers, but some of the stress was shared this week with workers at Abilene Regional Airport. Dense fog at Dallas-Fort Worth Airport caused seven flights to divert to the small airport, which generally never sees that much traffic. One café ended up selling out of some items and had lines 25 people deep. A kind passenger reportedly helped the café out by changing out the trash bag!

I actually had a lot more to cover from the week, including bonus mileage and point offers from airlines and hotels, but the other fine bloggers here at BoardingArea covered them nicely. As this post goes live, I’ll be listening to View From The Wing’s Gary Leff give his Award Bookings presentation at the Chicago Seminars.

In other airline, hotel & travel industry news last week…

• An airline analyst predicts American Airlines could file bankruptcy in 2012. He points to the fact that American is “on track to lose $1.2 – $1.4 billion in 2011 and $1 – $1.3 billion in 2012.” The carrier’s cash position is also less than ideal and while I had a fantastic experience flying with them this year, I will not continue flying AA in part because of their financial situation and otherwise because I’m so close to million-miler status with United Airlines.
• Delta Air Lines is accelerating their addition of coach seats with extra pitch and revealed this week they will install their “Economy Comfort” seats on more than 800 aircraft by the summer of 2012. As is common in the industry today, those seats will be available for purchase to non-elite passengers for an additional fee between $19 and $99 depending on the flight distance.
• United Airlines has elected a new Air Line Pilots Association chairman as the carrier’s union representative. Jay Heppner will replace Wendy Morse in the position in January and he has been with United for 26 years & currently captains Boeing 777s. He states, “This election is not about our new contract (United & Continental).” He continues, “There are assuredly other issues that need to be resolved in parallel, but none so critical” as a joint contract.
• I previously reviewed Google’s Hotel Finder tool and they have now expanded it to include European cities. It’s a unique feature and allows you to search for hotels with the power of Google’s map capabilities. It still refers you to Online Travel Agencies (OTAs) to complete a hotel purchase with the option to visit the hotel’s own website. I’ll be monitoring how Google proceeds with this tool and their currently underwhelming Flight Search feature.
• Orbitz, another OTA, has been fined $60,000 for “failing to adequately disclose taxes and fees in certain airfare advertisements in early 2011.” The fine comes from the U.S. Department of Transportation who claims Orbitz had ads on their homepage that would only reveal full tax & fee information after clicking into an alternate page. Orbitz claims they have rectified the error and are currently in compliance.
• Looking for a job in the travel industry? Priceline is reportedly adding more than 500 call center positions in the U.S over the next five years. The new hires will work in the OTA’s call center in Michigan and primarily focus on Priceline’s Booking.com branch. Priceline currently employs 750 people in the U.S. and 2,650 overseas.
• Finally, there’s a bunch of articles from the past week about Lufthansa and Frankfurt Airport. Lufthansa will adopt the full-fare advertising requirement here in the U.S. on November 1^st, earlier than the required January 24, 2012 date. The carrier also claims the recent court ruling disallowing night flights at FRAport will cost the carrier “double digit million of euros.” The new rule bans flights at the airport from 11:00pm to 5:00am. On a more positive note for FRA, they’ve opened a new $1.05 billion fourth runway last Friday. Before Friday, the airport had two parallel main runways that couldn’t be used simultaneously given their proximity, so the new runway will ease congestion and delays.

As a blogger I bookmark and follow a huge amount of travel-related websites that feature news and reviews in the airline and travel industry. One of them is Tnooz.com whose tagline is “Talking Travel Tech.” It really is a fantastic site and they frequently cover global distribution system (GDS) issues and stories for which I enjoy and geek out on given my previous work history in the industry.

One article last week entitled “Six myths of air travel search on the web” caught my attention and I clicked in thinking I’d once again agree with their normally accurate reporting. Some of the conclusions in that article completely took me by surprise and I have to share my disagreements here.

Myth 1 – Air search is simple and easy. They claim, “Invariably, it is difficult to find prices and routes, and there is a bewildering array of options.” What? Go to any Online Travel Agency (OTA) or airline website, plug in your dates and to & from cities, and you quickly get a selection of routes and fares. I just don’t understand why they think it’s so hard to find this information.

They continue, “Users can spend hours looking at different possible options… (often finding a) bewildering array of options.” Yes, when you search for a ticket many pairings of flights appear, but they’re generally sorted by time-of-day and price. Is it really that difficult to comprehend the search results?

Myth 2 – It doesn’t matter where a user searches (the results are the same). In my experience, yes, I’ve occasionally found different hotel prices on different sites. It’s not very often and it’s normally due to the fact that the OTAs aren’t quick enough to pull down availability when a hotel reports expired rates. On the airline front, however, OTAs generally pull real-time availability and this article claims, “The results, regardless of search site, are inconsistent and generate little trust for the user.” When you actually click through to book a flight at a quoted fare, the OTA immediately confirms real-time pricing and will display a “We’re sorry, this fare no longer exists” message when warranted. Okay, maybe I’ll give them a little leeway in the “trust” issue, but they shouldn’t claim inconsistent results when OTAs do in fact pull actual pricing.

Myth 3 – Air search works. They claim, “Frankly, it doesn’t. For something that looks like a commodity product, an airline seat is complicated.” I’ll give them credit there as ancillary fees create a lot of confusion and inconsistency when searching across all carriers, but they continue on saying, “(some websites) often powered by ITA generate a result, but this is no longer dynamic. Meanwhile, the internal price from the call centre agent is dynamic and can be different.” Nope. ITA is by far the most powerful and accurate airfare search tool I’ve ever come across. If anyone has real-time availability and fares down, it’s ITA.

The remaining myths discussed do have their merit and I’d encourage you to read the full article. Maybe I’m being too critical because of my “expert” travel experience and abilities, but I do feel this writer misinterprets the ease we have in searching and booking air tickets today. Google Flight Search needs a huge amount of improvement to become a leading tool for flight bookings, as he acknowledges. He also notes the inability to book flights after having found an ideal itinerary on Kayak. His claim, though, that finding flights “should be a heck of a lot better than it is,” seems ridiculous in my mind. Don’t you find booking flights pretty convenient today?

In other airline, hotel and travel industry news this week…

• The Transportation Security Administration has officially started a “trusted traveler” program this week. According to the TSA, “This pilot program will help assess measures designed to enhance security by placing more focus on pre-screening individuals who volunteer information about themselves prior to flying in order to potentially expedite the travel experience.” I was actually offered an invitation to participate in this program, but declined since it currently only covers domestic passengers flying out of Atlanta, Detroit, Dallas and Miami. I fully look forward to such a permanent program and will definitely apply.
• Our air traffic control system here in the United States is totally antiquated with even Jeff Smisek, CEO of United Airlines, poking jabs at it. Eventually it will be satellite-based offering efficiency unmatched by current ground radar capabilities. The $2.1 billion enhancement is still underway, but the FAA this week has stated “software problems” exist that will delay full deployment. The NextGen system was scheduled to go into effect by the end of 2012, but now won’t likely be a reality until 2014.
• Rising airfares are always a hot topic and the mainstream media is quick to note when fares increase or when airlines add additional surcharges, such as those seen around the holidays. We are still, however, paying relatively much less when looking at it from a historical perspective. A Wall Street Journal reporter notes, “Average domestic airfares, adjusted for inflation, have fallen 16% since 1995.” When demand for air travel falls, such as it did post-9/11, airfares are noticeably cheaper. There are still, of course, sales and periods of the year when prices are incredibly cheap (January & February), but we all should recognize just how inexpensive it remains to travel hugely far distances in a matter of hours. Do I like it when fares rise? Of course not, but if you really think of the incredibility of what air travel offers, a rise in airfare shouldn’t be such an earth-shattering shock.
• American Airlines was largely in the news this week due to its nearly 40% drop in stock price and rumors over a possible bankruptcy filing. Also, as you might recall, the carrier placed one of the largest aircraft orders in history recently. I’ve read so many articles claiming “yes they should,” or “no they wont” file Chapter 11, but do any of us really know? It’s all speculation and I think had they filed back when many of the other majors did, they’d be posting profits akin to what Delta Air Lines and United Airlines are today. Once I hit million-miler status with United, I might likely jump ship and become loyal to American as they really impressed me this year.
• Advertisements are everywhere. Just today inside the United Club at LAX I noticed a huge ad appearing on one wall. Medford airport in Oregon is looking for additional revenue through offering up the placement of ads on its control tower. Exposure would be significant both for people at the airport and those driving nearby as the picture in the article shows. Can’t we go anywhere without ads? Yes, you can just ignore them, but I’m tired of being bombarded by them. I absolutely love that Wimbledon has consistently disallowed ads appearing around the courts. It’s so refreshing. There is one brand seen… Rolex on the clock, but otherwise it’s a clean ad-free environment.
• I seem to write about this every week, but it’s worth mentioning again. Qantas once again has cancelled and delayed flights this week due to labor unrest. I’ll give unions credit for championing in the benefits even we non-union workers enjoy, but I think the disruptions they cause in events such as this is just ridiculous. On a more positive note for Qantas, the carrier will begin daily Sydney to Dallas service – up from four times weekly – beginning in July 2012. The Boeing 747s on that route will feature the fully-flat Skybed seats in business class and Recaro Premium Economy seats.
• It’s common for airlines to be fined for false or misleading advertising or failure to comply with government standards, but this is the first time I’ve read that an Online Travel Agency (OTA) got dinged. France has fined Expedia $484,000 for “misleading marketing practices.” Among the charges, France claims Expedia showed hotels as being fully booked when they weren’t, incorrectly displaying hotel phone numbers and advertising prices as promotional rates when they were just standard prices. Half a million dollars, though? Ouch!

A web usability surveyor based in Amsterdam named Usabilla just published results detailing user experiences on airline, hotel and Online Travel Agency websites. Participants were asked to perform simple tasks, such as “where would you click to get your boarding pass,” and leave additional comments about layout and other site features or functions. The full report can be downloaded here, but I’ll sum up some of the findings below.

A total of 800 people took part in the study that specifically looked at the following websites:

Airlines: Many participants specifically called out they hated advertisements on airline websites and several remarked they’d prefer to see all-in pricing instead of “from” rates that often exclude taxes and fees. Delta won the best score for speed and accuracy for the “where would you click to get your boarding pass” question with KLM coming in last. Maybe because I’m so used to it, but one person said United has too much different info on the homepage and it should be simplified. I actually think United’s landing page is just about ideal.

Hotels: Here the survey takers were asked to click on things that made them trust the website and other items they liked and why. Many specifically called out the strength of the brand through their logo, as well as clear contact information and the legal mumbo jumbo found in the privacy policy and other areas. Things they liked included luxurious scenes in pictures, ease of navigation and clear identification of other hotel brands within the chain. Unpopular here were testimonials, social media buttons and a cluttered design. There was really no winner or loser here as the purpose wasn’t to rank the appeal or functionality of each site, but Hyatt got some praise for linking to their YouTube page. I don’t get it really, because most of the videos there are just plain cheesy.

Online Travel Agencies: For the OTAs, users were asked to click on things they liked and those that they would remove. Most popular of the likes was the search functionality, telephone contact numbers and popular destinations. Expedia’s ‘deals and offers’ were well received, but the similar category on other OTAs failed for whatever reason. It seems absolutely everyone hated the Facebook ‘Like’ & connection and find it a ridiculous thing to include. Also not well received were areas or ads promoting site functionality and “buttons” that are really advertisements. There’s also a love-hate relationship with Priceline’s William Shatner (30% clicked him for a thing they like, 23% for dislike) and Travelocity’s gnome (29% like, 19% dislike).

This study was rather limited in scope with just a couple of questions asked per website, but it was still interesting to read over and I’d be more keen to take this type of hands-on visual survey method over the “on a scale of 1 to 10” type.

Last month Google launched Hotel Finder, a new travel tool that searches for hotels based on city and other inputs from the user and returns Online Travel Agency (OTA) pricing. Limited to the United States for now, you can type in a city name or zip code and a small map will appear along with a list of hotels within the outlined spotlight on the right-hand pane. Pricing information is listed, but it’s for dates pre-assumed by Google and I’d rather they leave the pricing off until actual dates are selected. Further filtering options include price, “compared to hotel’s typical” pricing, hotel class and Google user rating.

I plugged in a two night stay in Chicago this coming weekend and filtered my search to hotels $200 per night or less. The resulting list initially defaults the properties by decreasing user rating, but it does allow you to sort on the same search parameter offerings, but not hotel name (which I find odd). While hovering over a property a button appears that allows you to add it to your shortlist at the top for further consideration. Clicking a hotel in the list opens up a photo synopsis and mini description along with the first 140ish characters of two user reviews. You can click to read all reviews and additional links appear for external site reviews like TripAdvisor and HotelChatter.

When a property is on your shortlist, a ‘Book’ button appears (also in the photo/description view) and when clicked, shows the rates at several OTAs as well as a link to the hotel site directly. I clicked into the Priceline offering and was taken right to the booking page for the rate advertised.

Back to the map, you can click for a full size view and click & drag each corner of the shape to modify the area of hotels to include. The usual zoom in and out functionality is included, but not the rotational panning feature. Here you have to do the old school method of holding your click to move the map. The hotel names and small picture appears when you hover over one of the blue dots denoting a hotel. “Popular” areas are highlighted and in theory this helps you decide on an area frequented by tourists.

Two glaring things are missing from this otherwise nifty tool: one being the ability to search by hotel name and the other a neighborhood drill down. If you don’t know the city names around O’Hare Airport, for example, the only way to get a list of hotels is to drag the spotlight area to include the vicinity around the airport. Not very practical. Another feature not so critical, but incredibly helpful, would be to expand the shortlist function to provide a comparison of amenities at each property to help in the narrowing down process.

It’s still listed as “experimental,” but I anticipate Google will further develop this tool and other travel functionality. What would really get me excited about it would be inclusion of hotel direct pricing and the ability to search specific room types. Until then, it will remain off my bookmark list as I generally don’t book hotels via OTAs.

In other airline, hotel and travel industry news this week…

• Late last Friday US Airways filed a lawsuit against… its own pilots. Upset with what they’re calling an “illegal slowdown” by some East (read: US Airways) pilots, the carrier claims their West (read: America West) pilots are far more efficient in minimizing delays that impact on-time performance. Having taken weather and other non-pilot factors out of the equation, US Airways claims the percentage of flights arriving on schedule by East pilots has declined 11% since May. As it is, both geographic pilot groups have been at odds with each other since the merger of America West & US Airways over seniority issues. Still though, is a lawsuit against your own pilots the productive way to resolve the issue?
• Staying with US Airways news, one of the carrier’s former mechanics was sentenced to two years in prison and ordered to pay full restitution for stealing $586,000 worth of equipment, some of which he sold on eBay for approximately $350,000. Items included torque wrenches, headsets, airplane landing lights, seat belts and a large hydraulic jack. Sadly, he had a 30-year career with the carrier and an otherwise clean record. Claiming disgust with being demoted and having his pay and retirement cut, he sought to reclaim his losses through theft.
• The battles between American Airlines and Orbitz are ongoing, but both parties have entered into an agreement that will keep the carrier’s flights on the OTA “into 2012.” The court order that required American to restore flights on Orbitz dictated it be maintained that way until a new court order, or September 1, 2011. In likely cooperation with each other to avoid additional litigation, they appear to have agreed for a mutual extension for the time being.
• In coincidentally related news, Travelport (who has a 48% controlling stake in Orbitz) has extended a content deal with American Airlines ensuring the carrier’s full availability, fares and other content will continue beyond the current expiration in the Worldspan global distribution system (GDS). Travelport operates three GDSs, namely Apollo, Galileo and Worldspan, and the day after the Worldspan announcement, they confirmed full-content agreements for Apollo and Galileo would also be extended. The GDS world is often confusing to the regular traveler, and I intend to devote a future post into explaining the systems, their origin and current controversy in the industry. Oh, and separately, United Airlines Economy Plus seats can now be sold by agents booking through Travelport GDSs.
• Delta Air Lines began new nonstop service on the Los Angeles to Oakland route on Monday. Operated by SkyWest, Delta is hoping to capture some of the Southwest Airlines traffic in that market and offers five round-trips daily. American Airlines via their Eagle regional subsidiary will begin daily LAX-Aspen flights this ski season beginning December 15, 2011, continuing until April 2, 2012. Lastly, Etihad Airways, the flag carrier of Abu Dhabi (UAE), is looking to expand their Australian presence beyond Sydney & Melbourne to possibly include Perth and Adelaide in the future. My opinion… probably an add-on segment to existing flights.
• Finally, I was pleased to see many companies in the industry I follow post profits for this recent quarter and/or half-year. In addition to the major carriers (sans American), Allegiant Air posted a net income of $11.9 million for the second quarter and the carrier is all but certain to begin service to Hawaii in 2012. Hertz saw a $55 million profit in the same quarter compared to a $25 million loss in the same quarter of 2010. Hyatt Hotels citing strength in “select-service brands” (e.g., Hyatt Place and Summerfield Suites) posted a net income of $37 million. To finish, and perhaps to American Airlines’ digust, GDS provider Amadeus saw its six-month net income grow 12.2% to a whopping $377 million.

Several smaller stories in the airline, hotel & travel industry caught my attention this week and I’ve summarized them below:

• A Canadian couple sued Air Canada and won an award of C$12,000 (plus an apology) from the airline failing to serve them “in French” aboard their flights to the United States. Records show the passenger, Mr. Thibodeau, a Canadian federal government employee, is fluently bilingual and critics claim him to be the “equivalent of a compulsive coupon clipper” demanding the Canadian law of providing airline services in both French and English be upheld at all times. (Hmm, would this equate to a Skykit on United?)
• Attention all Priority Club members, Crown Plaza London-The City now offers a “snore-absorbing” room for those pesky people with an obnoxiously loud issue upon falling asleep. The room features soundproof material on the walls and headboards, plus a white-noise machine and “anti-snoring bed wedge” to assist guests to fall into a calm REM rest while encouraging them to sleep on their sides or upright.
• The FAA is investigating a report where an ATC controller in the Denver Center tested positive for alcohol while on duty. The center in Longmount, Colorado immediately removed him/her upon failing the random testing and forwarded the results to the FAA. Air Traffic Controllers are also held to the same strict standards as pilots where anything at or above a 0.02 is against FAA guidelines.
• Identity theft has been rampant in the past decade and now thieves are targeting your hard-earned frequent flyer miles. The research firm Kaspersky Lab identified phishing scams targeting Brazilian nationals where one customer lost approximately $7,600 worth of airline miles. As is common with all such scams, these came in the form of emails that offered bonuses or other prizes after logging into a fake website with their frequent flyer data.
• Alaska Airlines announced this week new service between San Diego and Honolulu beginning November 17, 2011. The single daily nonstop in each direction will be operated with a Boeing 737 and offers direct competition with an existing Hawaiian Airlines flight between the city pairs. I’m all for a fare war to Hawaii, so my hope is this will bring down fares from (sort-of) nearby Los Angeles. That’s a lie. Having worked in United’s Revenue Management department, I know they’d only tinker with the direct SAN-HNL fare structure and leave LAX out of it.
• United Airlines (and Continental Airlines by default) signed a new multi-year agreement with Travelocity to continue their existing relationship with the Online Travel Agency (OTA). Largely a PR release by both companies, it basically means United will continue to offer its fares & schedules as usual via a Global Distribution System (GDS) to the OTA. Not really surprising in my mind as OTAs still generate a significant amount of revenue for airlines, but I still think all airlines are keen on American’s initial undertaking to challenge the distribution model. My prediction is we’ll see dramatic changes in the next 5-10 years in that model.
• And finally, while on the subject of United Airlines, they posted a second quarter 2011 profit of $538 million yesterday beating analyst expectations. Even with the revenue hit due to the Japanese earthquake & tsunami, a 30% rise in fuel costs from the same period a year ago, and $39 million in merger-related costs, United shined in the second quarter. Congrats to my preferred carrier… keep it going please!

At the turn of the New Year, Expedia, the country’s most visited Online Travel Agency (OTA), pulled American Airlines flights from their site after American pulled themselves out of Orbitz, another OTA. In a rare show of solidarity with a competitor, Expedia didn’t like the cards being dealt to Orbitz, namely sign up for a direct-connect platform to access American’s flights & fares, or else “bu-bye.”

As of yesterday, however, American’s flights are back for sale on Expedia after signing a letter of intent committing to access American’s products via a modified direct connect technology in the next 12 months.

The technology in a nutshell bypasses the traditional Global Distribution Systems (GDSs) used by just about every travel agency (online or brick & mortar) out there. The GDS systems are rather archaic, and were initially developed by the airlines to facilitate ticket sales. The airlines pay fees to the GDSs on a segment basis, ranging anywhere from around $3 to upwards of $6 per reservation depending on the amount of flights in an itinerary, among other factors. Compound that by the sheer volume of reservations out there, and you can imagine how high these distribution costs are to the airlines.

It’s was a bold move by American to spearhead a potential industry changer in the way airline tickets are sold, and as the months have progressed, they really haven’t backed down. I would imagine the other airlines are peaked with interest, and are quietly appreciative of American’s first strike in shaking up a controversial legacy & costly booking system.

You still cannot book American on Orbitz, however, where the situation is a bit different. Travelport, the operator of Apollo, Galileo & Worldspan GDSs, has the largest controlling share of Orbitz, so their hand pretty much dictates how Orbitz proceeds. As it is, they provide incentives to the OTA by keeping American’s flights off-sale and by refusing to sign a direct-connect contract with the carrier.

While I can’t blame American or any airline in wanting to reduce distribution costs, it really comes down to how it impacts the traveling public. My subjective analysis would be that if most people price shop across multiple OTAs and/or airlines, the impact is negligible. Reality, however, might show a different result, and it has been the claim by GDSs that direct connect technology will do nothing but hurt consumers ability to choose and reduce transparency to the lowest fares.

American Airlines is holding firm in their commitment to further the evolution of how and where the carrier’s tickets are shopped and sold. As I previously blogged, American is seeking to reduce distribution costs by steering away from the legacy global distribution system (GDS) model used by most online travel agencies (OTAs). New signs are emerging that show American is beginning to make headway in this battle.

Earlier this week, Priceline signed an agreement with American stating they will use the Direct Connect technology in the near future. The negotiations for this contract have likely been going on for some time given American’s ads directing traffic to Priceline (and Kayak). Also this week, American outted Vegas.com as being contracted to use the direct link, and it is being reported they’ve been using it for about five months already. Separately, US Airways and Expedia signed a good faith type of agreement whereby the carrier’s flights and ancillary services will continue to be offered exclusively through GDSs.

This led me to look at just how much traffic is steered to the OTAs, and I was able to find a recent summary revealing the most popular travel shopping websites in the United States for the week of January 15, 2011.

While the actual number of visits isn’t revealed by website, it is still interesting to see how the “big four” (Expedia, Priceline, Travelocity, and Orbitz) compare against each other. The spread between number one Expedia and number two Priceline is significant, and allows the former to maintain its majority share consistently week to week. Also, the previous period’s results showed Orbitz & Travelocity switched in positions, so I bet that is a constant week-to-week occurrence.

I’ll be keeping my eye on these figures in the coming months, and likely post any major moves I notice.