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Does direct connect benefit travellers?

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  • Padilla, Jorge
  • Piccolo, Salvatore

Abstract

Direct connect is a business practice that, after a period of irrelevance, has become fashionable again in the travel industry. Airlines provide direct access to their sale systems to travel retailers, who can thus avoid dealing with traditional indirect distribution intermediaries, such as GDS aggregators. Although this practice is often advertised as pro-competitive, we show that it may actually harm consumers, especially in very competitive environments and when it does not involve all retailers in the market.

Suggested Citation

  • Padilla, Jorge & Piccolo, Salvatore, 2020. "Does direct connect benefit travellers?," Economics Letters, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:ecolet:v:188:y:2020:i:c:s0165176520300070
    DOI: 10.1016/j.econlet.2020.108952
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    References listed on IDEAS

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    More about this item

    Keywords

    Agency model; Direct connect; Distribution channels; Travel industry;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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