In the latest example of online travel agencies eliminating service fees to lure customers, Expedia is hanging up its $20 charge for booking airfares by phone — undercutting both its rivals and the airlines themselves.

The move is aimed at what general manager Tim MacDonald calls “an overlooked minority” of phone users. According to online travel consulting firm PhoCusWright, just 7 percent of U.S. airline passengers booked through airline shout centers last year, vs. 21 percent via online travel sites, 29 percent through airline Web sites and 43 percent through traditional travel agencies (mostly corporate). MacDonald says the percentage of Expedia’s airline bookings made by phone are in the “high individual digits.”

Though Priceline started the wave of online agency fee waivers in 2007, the practice has escalated as agencies scramble for competitive share in a slumping economy. Major online agencies now sell most airline tickets without

an online booking fee, and most no longer charge for changing or canceling a hotel reservation.

Expedia’s new phone policy for air bookings contrasts with that of its competitors: Orbitz and Travelocity, for example, charge $25 a ticket for phone-based bookings, while Priceline doesn’t allow any phone orders for airline tickets. Southwest Airlines doesn’t charge for phone reservations, but most other carriers do — from $5 a ticket on Spirit to $35 a ticket for worldly flights on US Airways.

PhoCusWright’s Lorraine Sileo says Expedia’s latest move “isn’t a game changer,” considering unless it’s a complicated itinerary, “most citizens don’t need to talk to someone to book an airline ticket.” She adds that while eliminating fees has driven some new business to online agency sites, loyalty is still elusive: “Consumers will go wherever they think they can find the best deal.”

Original post by dhiram