The feud between online travel agents (OTAs) and low-cost carriers like Ryanair (NASDAQ:RYAAY) escalated on Tuesday, with On the Beach Group appealing to the UK Competition Markets Authority (CMA), aviation authorities, and senior transport ministers. The company accused budget airlines of exploiting their market power with aggressive tactics designed to limit consumer choice.
On the Beach CEO Shaun Morton criticized these airlines for using scaremongering and smear campaigns, accusing them of removing consumer choice from the market. His report alleges that carriers are mistreating OTA customers by questioning the legitimacy of their bookings and in some instances, removing them from overbooked flights in favor of package customers.
Morton's report also accuses Ryanair of blocking third-party bookings and launching reputational attacks to deter consumers from booking with OTAs. It highlights an invasive verification procedure for passengers who book via third parties, claiming it breaches data protection laws.
Budget airlines, who prefer direct bookings to sell add-ons like extra luggage space, have criticized third-party bookings for hindering appropriate customer interactions. In response to the allegations, Ryanair rejected the use of credit cards for such bookings and accused OTAs of falsely advertising lower fares than airlines and misselling flights with hidden mark-ups.
On the Beach has urged the CMA to review carriers' practices and establish a code of conduct for collaboration. The company warns that budget carriers' anti-competitive behaviors could reduce competition, and regulatory adherence, and increase holiday prices.
While this controversy continues to unfold, other budget airlines such as Wizz Air and Easyjet have not commented on the matter.
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