A David and Goliath battle could be brewing for online flight booking services, with a massive new player about to enter into the market.
Ryanair CEO Michael O'Leary has told Ireland's Independent newspaper that his company is working with search engine behemoth Google (NASDAQ: GOOG), to create a new booking platform which could change the way flights are booked "forever".
"There are some very exciting developments with Google, where we have been working with them on sharing the pricing," O'Leary is quoted as saying.
O'Leary describes the project as building a pricing comparison system where Ryanair's pricing is shared with Google who will be able to display route options and allow users to select the cheapest fares.
Never one to mince words, O'Leary says: "[Google] want to launch with us and we're working with them on that kind of product. It'll blow comparison sites like Skyscanner out of the water."
Like many of Google's products, O'Leary says the web giant will not charge fees for the service, but make additional revenue from advertising. The system will apparently allow users to click through to an airline or other seller's website where the fare will be sold.
The project potentially has big implications for companies like Webjet Limited (ASX: WEB) and Wotif.com Holdings Limited (ASX: WTF), as well as the raft of other booking and price comparison websites. Rather than specifically access the websites, users could search Google and be directed to the cheapest option.
Both Webjet and Wotif also generate revenues from the sale of hotel rooms which do not appear to be a feature of Google's current system, but could be a natural extension further down the track. At this stage the project is just with Ryanair, and O'Leary said he expected the project to go live by the end of March.
Foolish takeaway
The company that acts as the 'go-to' website for finding everything on the internet could soon be the first port of call for people seeking the best price when booking flights online. Although Google may not charge for this service, there is a risk it will divert customers from specialty booking companies such as Webjet and Wotif, impacting on long-term revenues.
