Arthur's Blog: A Deeper Look at Frontier's Decision to Reward Passengers Who Buy Directly from the Airline's Own Site

Frontier Airlines is a fairly small air carrier, flying mainly out of Denver to and from other parts of the country and to Mexico. But the action taken by Frontier last week, creating advantages for passengers who buy their tickets on Frontier's website rather than those of various third-party online travel agents (OTAs like Expedia, Orbitz, and Travelocity), is bound to have a nationwide and industry-wide impact. That action makes such sense from the airlines' standpoint that it is bound to be copied by the larger carriers -- United, Delta, Southwest, and American. And the theory behind this step is already being followed by such smaller carriers as JetBlue, Spirit, and Theoretically, domestic air tickets are supposed to cost the same regardless of whether you buy them directly from the airline or from an OTA. The airlines' contracts with the OTAs are supposed to contain provisions guarding against price discrimination. The airline can't undercut the prices that they permit the OTAs to quote.
Already, however, airlines like JetBlue, Spirit and Virgin America have become notorious for their short-duration "sales" in which they cut the price of their air tickets for a brief period provided that such air tickets are purchased directly from the airline on the airline's web site. Similarly, Canada-based Porter Airlines flying in and out of Toronto to New York and elsewhere in the U.S. does the same thing; they frequently run sales cutting their fares by as much as $100, provided they are purchased directly from the Porter website.
Frontier Airlines, in its recent announcement, isn't offering cheaper airfares to the persons who book directly through its site -- but it is offering the near equivalent of a price reduction. The carrier is, however, offering better frequent flyer mileage, advance seat assignments, lower fees, and other perks.
Note that Frontier doesn't stop you from consulting flights and fares on the websites of the OTAs; by looking at those sites, you learn about the entire airfare picture for the dates and itineraries you desire; you read about numerous different airlines competing for your business.
But when the time comes to make a commitment and actually buy a ticket, Frontier is offering advantages if you do so directly from Frontier and not from Orbitz, Travelocity, or Expedia. Frontier thus saves the heavy commissions that they would otherwise be obliged to pay to the OTAs, amounts that must surely add up to millions of dollars a year.
So in this manner, buying an air ticket should become a two-step procedure for most members of the public. And because other airlines will surely follow Frontier's lead, it will necessarily become smart for just about everybody to spend twenty minutes or so on consulting the websites of the OTAs to get a total picture, but then to go directly to the airline for an actual purchase. You'll get a better deal if you do.