Beware of the Middleman – How to Deal with Travel Agents from an Airline and Customer Perspective

When the scientific fathers of the new institutional economics developed the theories around the Principal-Agent Problem (Akerlof 1970), they focused more on markets such as fruits, cars and insurances rather than on the travel industry, though which they certainly would have looked at today if they had to reinvent those theories.

Even in today’s environment, with tools like Internet booking engines, metasearch engines and other tools to book airline fares, the majority of sales is still driven by the travel agency community. This applies to the more traditional network carriers in particular. The relationship between travel agents, their customers and the airlines is thus an important subject, from both a management and a scientific perspective.

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