Does Direct Connect Benefit Travelers?

Direct connect is a business practice that, after a period of irrelevance, has become fashionable again in the travel industry. Airlines provide direct access to their sale 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 and when it does not involve all retailers in the market.