Ryanair teams up with a virtual unknown in the price-comparison market

Flight comparison websites

Comparative advantage

Jan 30th 2014, 15:04 by M.R.

IF YOU frequently shop for flights online, you will almost certainly be familiar with flight comparison websites like Skyscanner and Kayak. These so-called metasearch engines invite you to key in your desired travel itinerary, before pulling data from other websites—mostly airlines, travel agents and rival search engines—and aggregating the results into a list of available airfares. You can then orbit to the cheapest ticket and click through to the booking website. It’s not rocket science, and with a little flexibility you can usually find a bargain. But metasearch engines are not perfect. They are only as powerful as the data that feed into them, and some airlines refuse to cooperate. Without scheduling and airfare data from low-cost carriers like Ryanair and Southwest, metasearch engines will not always find the best deals. Last week, after ten years out in the cold, Ryanair suddenly started sharing its data. Worryingly for Skyscanner and Kayak, it teamed up with  a virtual unknown in the flight comparison market.
Google Flight Search launched in the US in 2011 and in Europe in 2013. Its market share is virtually non-existent, but these are early days for a venture that only traces its history back to 2010, when Google acquired ITA, a flight information software company.

Google’s platform is noteworthy for two reasons. First, its website has a more visual approach than the other platforms, presenting a global map with the lowest fares displayed in real-time next to city names. Being Google, the website instantly knows that I am based in London, so it pre-selects it as my point of origin and presents prices in pounds. Second, although technically still an intermediary site, Google is already the first port of call for most internet users. A googlable flight search engine therefore has an ease-of-access advantage over more detached third-party websites.
Convincing Ryanair to co-operate on the project is “quite a feather in its cap”, says Kevin May, editor of Tnooz, a travel-technology website. But it is not hard to see why it did. Click on almost any European destination, and Ryanair’s offering comes up as the cheapest deal. No need for Ryanair to pay Google advertising fees, then; the airline’s own prices will be what makes the website appealing. “It’ll blow comparison sites like Skyscanner out of the water,” Michael O’Leary, Ryanair’s boss, told theIrish Independent in his first interview about the partnership. Given that European market leader Skyscanner cannot display Ryanair’s prices, he could well be right. If Southwest were to strike a similar deal with Google, then the American market leader, Kayak, would feel the heat too. Indeed, the wider flight comparison industry saw the writing on the wall as soon as the ITA acquisition was announced. A group of software and travel companies, including Expedia, TripAdvisor and Hotwire, had already set up FairSearch.org, an advocacy website that rails against Google’s dominance and encourages anti-trust litigation against the company.
From Google’s perspective, the benefits of the partnership are self-evident. But why is Ryanair changing its tune? And why did it balk at free publicity for so long? Mr May says the airline, like most low-cost carriers, has historically favoured a direct-only approach to sales, insisting on distribution of its tickets through Ryanair.com. The idea is that by forcing consumers to visit its own website, Ryanair had a greater ability to up-sell ancillary services, such as charging fees for baggage allowances, meals and extra leg-room. Mr O’Leary told Gulliver last year that his website deliberately made people “jump over about six hurdles” to make a booking, because that maximised its ancillary sales, and “ancillary sales form a key part of us making air travel cheaper and cheaper”. Full-service carriers, meanwhile, have less incentive to boycott flight comparison websites, as their higher fares include such perks.
But everything changed last October, when Mr O’Leary promised to make his company less abrasive and more consumer-friendly. He admitted that easyJet, a rival carrier, had “wiped the floor with us” when it came to attracting business traffic. “Ryanair saw that easyJet, who started working with intermediaries a couple of years ago, was doing well,” Mr May says. “It wanted a piece of the action.” Business travellers expect a higher level of customer service, and often book indirect through travel management companies. Thus a re-think of the direct-only model was needed (along with a big face-lift of the brand). Most observers were sceptical of Mr O’Leary’s promises. The Economist reported the story under the headline “Oh really, O’Leary?” But Ryanair has followed up with concrete steps: lowering punitive surcharges, enhancing customer-service channels, improving its website and talking to third parties.
The big question is how will other low-cost carriers react? A Google spokesperson confirms that the company is talking to several other airlines. EasyJet and Wizz Air already share their schedules with Google Flight Search, but not their prices. If the platform grows in popularity, they will have to consider also jumping into bed with the internet giant. And the more comprehensive the metasearch marketplace becomes, the more consumers will benefit. The Google-Ryanair partnership may not be a death knell for Skyscanner and Kayak. But it is a clear sign that the competition is heating up.