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Does Direct Connect Benefit Travelers?

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Abstract

Direct connect refers to a business practice that has become fashionable again in the travel industry after a period of irrelevance. Airlines provide direct access to their sales 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.

Suggested Citation

  • Jorge Padilla & Salvatore Piccolo, 2019. "Does Direct Connect Benefit Travelers?," CSEF Working Papers 547, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:547
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    File URL: http://www.csef.it/WP/wp547.pdf
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    Keywords

    Agency Model; Direct Connect; Distribution Channels; Travel Industry.;

    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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