Searching for the best prices on flights can get confusing. Every website promises they have the cheapest rates available, and occasionally they deliver. But more often than not, there are other factors you need to know before you buy. Today I’m going to explain why it’s cheaper to book flights directly with the airline (in most cases).
Knowing how to get the best rate is important. But it is not the only thing. There are some issues surrounding customer service, bait and switch tactics, and incentives that you should also consider.
This article will cover what you need to know before you buy your tickets.
Different ways to search for flights
Online Travel Agency (OTA)
The first option is through an Online Travel Agency (OTA) – travel websites that offer flight bookings (such as Expedia, Travelocity, and Priceline). These websites have contracts with the airlines to sell tickets directly.
Your second option is flight aggregators such as Kayak, Skyscanner, and Momondo. These websites collect prices from OTAs and airlines and share all the options with you. The main difference is that you do not pay these aggregators directly. Rather, they send you to either the airline itself or the OTA to buy your ticket.
One key thing to keep in mind is that they also pull from small, lesser-known OTAs. Though some of these companies are legitimate, it is often hard to tell when buying. Some are pretty sketchy, offering one rate on the aggregator’s website, but when you click to purchase you find the price has changed.
Google flights is also an aggregator, but they only compare airlines and mainstream OTAs such as Expedia and Priceline. They don’t bother with the sketchy small OTAs as a general rule.
Lastly, you can purchase directly with the airlines. This means going straight to the airline website or app to buy your tickets.
Yes, you can also buy tickets from travel agents, who have a few other options at their disposal. But this is a topic for a different blog post (coming soon).
Though there are three options for searching, ultimately, you can only buy your tickets from two sources – the airline or an OTA. Knowing where you are buying is the key. You can sometimes find cheaper flights with OTAs, but you need to know how they get those lower prices and what this can mean for you.
How Online Travel Agencies Work
OTAs tend to offer the same prices you can find on airline websites as a general rule of thumb. But when they do offer cheaper prices, they have a few ways to do it:
Sell flights for less than the actual cost.
This means they sell the flight for less than the airline is charging them (so at a loss). They do this in hopes you will buy your hotel or rental car from them as well, so they can make up for the loss. They also do this as a way to gain market share, offering you a great price now in hopes you will book all of your travel through them in the future.
Discount their commission
When an OTA sells a flight, hotel, or any travel item, they receive a commission from the provider (the airline, the hotel chain, etc.). One way to discount your price is to discount their commission. For instance, if they usually get a $100 commission, they can take $50 instead and deduct $50 from your price.
Bulk and special pricing
In some cases, OTAs can also reserve a block of seats from the airline. In exchange for selling all the seats, the airline gives them a discounted rate.
Airlines also offer special rates on occasion but only to one or two OTAs at a time. They don’t want this lower rate widely available, so they are pretty picky about who has access.
The drawbacks of OTAs
Seeing how OTAs can get better prices it sounds like a no-brainer to buy your tickets with them. But it’s not quite that simple. There are reasons why a discount may not be worth the hassle.
If something goes wrong, you might be in trouble.
One of the main reasons I avoid OTAs (unless the discount is significant enough to be worth the risk) is the middleman factor. If something goes wrong, you have to go through the OTA to resolve it. This creates more delays and potential push-back from the airlines, leaving you stuck in the middle. Without the option of going straight to the airline, you can be left with a mess.
This goes for refunds and cancellations as well. There can be extra delays in receiving flight credits and refunds because they must first go through the OTA. Not to mention, many OTAs charge exorbitant fees to handle changes or cancellations.
Less than ideal customer service.
Some OTAs, especially the smaller ones, choose to save money by skimping on the customer service department. This can include understaffing or outsourcing the call center. It can also mean ramping up fees for every little thing.
The 24-hour rule might not apply.
The federal government (U.S.) requires airlines to allow you to cancel a flight without fees or penalties if you do so within 24-hours of purchase. But, this is only guaranteed if you buy directly with the airline. OTA’s don’t have to stick to this policy. Some may offer it as a courtesy, but it is not mandated. Many more prefer to make all sales final.
Prices can change
Have you ever found a reasonable price only to have it change once you were ready to buy? This often happens with OTAs. You see the price listed without the extra fees and taxes only to have an unwelcome surprise when you get to the purchase screen.
Sometimes this is due to the price no longer being available when you get to the purchase screen. Sometimes it comes in the form of extra services fees, baggage fees, and charges. You may even get a call after buying the ticket to say the price has changed and you have to pay more.
Okay, so OTAs aren’t always a great idea. So what is?
Why it’s cheaper (and better) to book with the airline
Booking with airlines can often give more benefits than booking with OTAs. Here are just a few:
Best Rate Guarantees
Many airlines offer the best rate guarantees when you buy through their website. Why? Because it’s cheaper for them if you buy your tickets from their website or app. When you come to them directly they pay less in commissions and marketing for OTAs and travel agents.
Also, as Conde Nast Traveler wrote in a recent article,
“Alaska Airlines, Delta, JetBlue, and Southwest each have transparent price guarantees that will give you credit or refund for the difference in any fare drop. But pay attention to the specifics, as they vary: Alaska and Southwest will refund or credit you if a lower fare is found on their sites any time up to departure, for example. At the same time, Delta only honors price drops that occur in a 24-hour window.
Meanwhile, JetBlue offers a 14-day price guarantee from the time of booking. Customers receive the amount of the difference in the fare in the form of future travel credit if a lower fare is found. Delta also offers a voucher and credit for the difference in fare if a lower price for the same ticket is found at least $10 cheaper on their website. The other two of the “big three” carriers—American and United—have [less transparent policies], but will issue a refund and future travel credit if a lower fare is found within 24 hours on their respective booking sites”.
When things go wrong, speaking directly with the source provides far better results. Whether you need to cancel or change a flight, get a refund, or deal with an emergency, the airline will be the best source to help.
Yes, some airlines have better customer service than others. But in general, every airline is better than an OTA in that they are the only source that can get it done. The OTA is just the middleman, they have no power in and of themselves.
Timely refunds and credits
When you need a refund or credit, you have a much better chance of getting one on time than if you go through an OTA. Again, some airlines are better at this than others, but adding the complication of a middleman makes it more difficult.
Earn and Use your miles
You can still enter your frequent flyer miles when booking with an OTA, but getting full credit depends on the fare class you choose.
Also, many airlines want to entice you to book directly with them. They do this by offering the best rate guarantees and/or padding the points you can earn. For instance, JetBlue provides 3 points for every $1 spent as a member. But, if you book on their website or app, you get double the points – so 6 points per $1. Many others offer similar incentives.
This is not only true with earning points but also with maximizing airline credit card advantages.
As the Thrifty Traveler writes:
“If you’ve got an airline co-branded credit card, you could be earning more points when you book directly through the airline. Take Delta’s cards, for example. (In a recent promotion) If you’ve got the Delta SkyMiles Gold American Express Card, you earn 2x SkyMiles on purchases made directly with Delta – and through Dec. 31, 2020, you can earn a whopping 5x SkyMiles!”
Though they were speaking about a previous promotion, there are always new promotions available. Not just with Delta but with many major airlines.
How to decide whether to use an OTA or Airline to book
It is safer and often carries more perks and savings when you book with the airline directly. But, there will be times when the discount offered by the OTA is too big to dismiss. So here are some rules of thumb for deciding:
Book with the OTA if:
- The price savings is at least $50-$75 per person (on the final purchase price – be aware of price changes as you get to that screen as discussed above)
- You are 100% sure you will not need to change or cancel the flight.
- It is a reputable company (not a small OTA that might be scamming you)
Book with the airline if:
- You may need to make changes
- You want to earn maximum points or miles, and the airline offers special incentives
- You want to make sure you have direct access if something goes wrong
- The OTA discount isn’t worth the potential stress and headache if something goes wrong