The latest update on the AA-Kayak standoff (background) is that American Airlines Inc. has filed a lawsuit in the Judicial Court of Tarrant County, TX against Kayak Software Corporation (which owns Kayak.com and Sidestep.com) which alleges breach of agreement - Even though Kayak has stopped displaying AA fares directly, they still send customers who want to book AA flights to Orbitz.com and Cheaptickets.com (both owned by Orbitz Worldwide Inc., which has a partnership for listing fares with Kayak).

The lawsuit also alleges breach of confidentiality provisions of the Agreement - ’Defendant [Kayak] has discussed the parties’ disagreements on Internet websites and blogs, making false and misleading statements about the parties’ relationship.’

Which pretty much means that Kayak’s lawyer will have advised them to stay away from making comments on the internet. Kayak is absolutely mum on the matter and there is no update and/or additional info about the issue or the lawsuit on Kayak’s website or blog. This was their last statement on the matter. They’re going to lose the moral high ground if this continues.

But that’s not all they’re losing. This is going to start hitting Kayak’s bottomline pretty soon. For the month of June, according to statistics from Compete.com, Kayak.com and SideStep.com were responsible for sending 1.3% of all visits to AA.com, which resulted in about 5% of all AA conversions. But apparently about 72% of consumers who clicked through from Kayak to Orbitz in search of AA listings will make their way to AA.com at some point during the same month, even if they do not use Kayak to do so.

So AA stands to lose a significant chunk of bookings in the short term if it totally cuts off Kayak, Sidestep, Orbitz and CheapTickets. In the long run, however, these customers will find another route to get to AA - Whether directly or through another travel search site and/or travel booking site.

Summary of it is that Kayak is playing a dangerous game here, which could end up with it losing a lot of loyal consumers. End of the day, if this results in a permanent cut-off of relations between the parties involved, AA won’t suffer too much ( in fact they might end up gaining more revenue as users start booking directly). Kayak, on the other hand, will definitely lose all of AA’s customers, and the associated revenue in commissions for referrals.

 References:

http://triphow.com/?p=466

http://aviationblog.dallasnews.com/Kayak%20Original%20Petition.pdf

http://competeinc.com/research/newsletters/july-2008-travel-research/

Posted on August 14th, 2008 by PLing
Filed under: Travel News