By dropping the fees they charge to book airline tickets, online travel agencies are cutting into the market share of airline websites and traditional travel agencies, according to Wall Street analyst Kevin Crissey of UBS.

"Our data suggests OTAs are taking share from both supplier-direct [websites] and from traditional agencies, with the latter likely seeing larger share losses," Crissey said in an Oct. 27 note to investors.

The fourth quarter may turn out to be the peak of OTA air ticket share gains, Crissey said.

Expedia, Orbitz and Travelocity dropped air booking fees in March as a promotion, then made it permanent in June. Priceline dropped them for its retail air business in late 2007.

"Our sources suggest online travel agency air ticket volumes and gross bookings have progressed better than our prior expectation," Crissey wrote. "We believe gross air bookings for the OTAs collectively were about flat in Q3," he said, adding that transactions for the same period were up 18%.

The third quarter was the first time that carriers could assess how big an impact the fee cuts were having on their own booking sites. Some airline executives said they lost some bookings at their websites, while others said they didn’t see any losses.

"We are clearly seeing an impact," Continental President Jeff Smisek told analysts last month during the airline's third-quarter earnings call. "There is no question about that."

Smisek wouldn’t say how Continental planned to win back that lost share because he was forbidden to talk about "forward pricing."

Other carriers reported a less severe impact.

The online booking market share loss was "not too high," Delta CEO Richard Anderson told analysts during the airline’s third-quarter earnings call. "We’ve seen really a negligible change in the bookings that come in through Delta.com, a few percentage points."

Delta took steps earlier this year that could have mitigated any OTA market-share gain. "We’ve reduced our direct-ticketing fee for reservations," Anderson said.

He added, "The bottom line is Delta.com continues to produce over 30% of our bookings. Typically we get higher-yielding tickets on Delta.com and through reservations. So overall, it hasn’t really had much of an impact on our distribution strategy."

But other airlines have noted the increase in airline ticket business for the OTAs, and carrier executives said it’s likely at the expense of traditional travel agents.

"We do see the online travel agencies have grown year over year," American CEO Gerard Arpey told analysts during the airline’s quarterly earnings call. "AA.com has also grown significantly year over year. So it would appear that the increase at the online travel agencies has been at the cost of the traditional channels."

Stephen Jarvis, Alaska Air Group's vice president of marketing, told analysts during Alaska's third-quarter earnings call, "We’re watching our distribution share through the online travel agencies increase significantly, but it’s not coming from the direct channel. It’s not coming from AlaskaAir.com.

"We have seen our growth at AlaskaAir.com taper a little bit year over year, but it is still increasing. So the share is actually being shifted from traditional brick-and-mortar channels."