Airline Leader Summit: Google monopoly is real threat to airline distribution

11 May, 2017

The world’s airlines are facing an increasing threat from Google Flight Search, and the technology giant’s monopoly position across multiple markets which could change the face of travel forever more. “Google Flight Search is bad for the airline industry and bad for travel distribution," says Bobby Healy, chief technology officer at Dublin-based CarTrawler, speaking at this week’s CAPA Airline Leader Summit in the Republic of Ireland city, suggesting that its power could “wipe out” review and metasearch sites, according to CarTrawler’s Bobby Healy.

Mr Healy's warning was based on Google's increasing exploitation of its monopoly positions in Search, on Android apps, and in digital marketing to intercept consumer searches for branded airline names and to direct them first to its Google Flights product.

Research of google searches for select hardware products shows that most of the time, the leading ad atop search results was for products sold by Google or companies owned by Google parent Alphabet. “Google and its sister companies appeared in the most prominent spot in 91% of 25,000 recent searches related to such items. In 43% of the searches, the top two ads both were for Google-related products,” says Mr Healy.

Therefore, airlines need to be better aware of the growing influence of third party data and sales platforms. “Google currently makes $16 per online airline booking [and] airlines willingly give them product and fares in real time. If you think that paying $5 or $6 per GDS booking currently is expensive wait until you are paying google $50 per booking in the future,” he says.

Airlines have provided Google with their inventory and pricing data and as such have created the “perfect storm”, a monopoly with “unprecedented access”. “Data is power, power is control. Customer access, insight, data, location. They know everything about your customer,” he warns airlines.

“The top of the trip planning funnel is a beachhead which - if Google controls it – will represent the biggest loss of control of distribution, and consequent rise in cost and margin erosion ever seen by the airline industry,” he adds.

There have always been intermediaries in the airline industry, but the internet has allowed them to have a closer relationship with the consumer. However, until now, intermediate of airline ticket sales has been fragmented and largely complementary to airlines' own direct channels.

Mr Healy says Google is “abusing its monopoly position in search and android to position itself between the consumer and the product at the expense of both the consumer, its competitors and partners” with what he describes as “Google’s stealth attack on travel,” where it is “going through the value chain eating everyone – starting with top of funnel, reviews/experiences/content, to meta, to OTAs and finally to suppliers”.

In today’s environment brand means absolutely nothing to a consumer, according to Mr Healy, especially when “a monopoly moves it from the display and promotes its own product” and in the process “wipes out META search channels and pushes them back down the booking funnel”.

Regulatory remedies may be necessary, but Mr Healy advised airlines to think before sharing their inventories. “Don’t let google have your data unless it is on your terms,” he warns airlines. Evolution with third parties selling travel and providing big data solutions is hitting airlines hard. “You’re doing all the hard work and everyone else is benefitting,” he says. However he believes that airlines can wrestle back some control. “If airlines acted like tech platforms they could take back control.”

READ MORE… "Google is bad for the airline industry" says CarTrawler. Airlines need vastly better data skills