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The sale of airline tickets involves a complex network of third parties and distribution channels. These include Global Distribution Systems (GDS) that connect business travelers to airlines and Online Travel Agents (OTAs) like Expedia and Kayak. The complexity means the price consumers pay may not align with what airlines receive.
For low-cost carriers, the ticket sales structure differs as they aim to optimize business performance by reducing operational costs. This involves being cautious about fees paid to brokers and third parties due to their already low prices. A slight increase in fees can significantly impact their financial results.
Low-cost carriers employ strategies to minimize distribution costs, often selling directly through their websites. Direct sales allow carriers to bypass third-party fees and collect valuable customer data, which informs route strategy decisions.
