American Begins Its Apology Tour Over Sales and Distribution Fiasco

For the last year and a half, American has been involved in a war against travel agencies, companies, and travelers themselves over how and where they can book their travel. General Vasu Raja led the fight, and, well, he lost. Badly. Now President Robert Isom has removed General Vasu from his post, as he tries to salvage the war effort.

Under Steve Johnson, previously Chief Strategy Officer, the plan now appears to involve a quick 180-degree shift in tone and substance. In the first communication sent broadly to agencies since the abrupt change in strategy, the airline took a much softer tone than it had taken in a long time, and as had been promised, it included a lot of carrots instead of sticks.

What has changed of substance? I’m glad you asked.

As had been previously stated, American will not penalize travelers by limiting mileage-earning opportunities based on where they choose to book. That was supposed to go into effect next month, but it has been scrapped entirely. Now the vast majority of fares will earn mileage regardless of where they’re booked. But that’s just the start.

American announced it had “begun returning content” to the traditional booking channels. These were the 40 percent of fares that were initially removed from standard agency booking channels in April 2023, forcing agencies to use New Distribution Capability (NDC)-enabled systems to gain access to those fares. This did not work well enough, and adoption was not nearly what American had hoped. Instead, agencies and corporates began shifting share away from American. With that in mind, it should be no surprise that this has already almost entirely been rolled back based on my spot checks.

I say “almost,” because it is not being rolled back entirely, and that’s by design. American will continue to keep Basic Economy fares out of traditional channels. United already pulled its own Basic Economy fares out awhile ago, so this isn’t a surprise, nor is it going to cause any agencies real stress. Few corporates are buying Basic Economy for their travelers. (And if your company is… why are you working there?)

American will also keep the extra fare types it rolled out as NDC-only… in NDC only… going forward. Those are:

Main Plus – bundled economy fare including extra legroom seating, priority boarding, and one checked bag Main Select – bundled economy fare including extra legroom seating, higher priority boarding, priority check-in, and free same day changes Flagship Business Plus – bundled business class fare including a third checked bag and Flagship First dining where it exists

You might think as I did that American would want to put these into traditional channels since it would appeal to the business traveler and help raise revenue more quickly. There is no technical limitation that prevents offering this via traditional channels, but I suppose this is American’s way of trying to keep any momentum going to try to keep agencies booking NDC even though most fares are back in traditional channels.

This might sound like using a stick, but it’s not really. To make it even more attractive, when travel agents book Main Plus/Main Select/Business Plus, American is giving commissions. And if agencies sell paid seats for travelers, those will also come with paid commissions. That is not something that has been broadly done in the US by any airline before, paying on ancillary sales, but it is bound to get agencies’ attention. All of this is only through September 30, so it’s temporary, but it’s definitely a big change of tune compared to what American was doing previously.

Over time, American says it will make more available in NDC only, including new dynamic fares (or as United calls it, continuous pricing) and new bundles. Details on that are scant. The letter simply says “more details will be shared in the coming months.”

The letter is unsigned, but it does end with this:

For all of our partners, we are listening to feedback, learning and adapting. We look forward to continuing our discussions with you as we evolve, and thank you for your partnership.

This is a far cry from the messaging the airline was using just a month ago, but that alone won’t be enough to get agencies and corporates to just come back right away. This is going to be a long process; it’s even tougher to claw share back once the other airlines have taken it.

At Cranky Concierge, we are still wary. We continue to provide clients with the best available options as we always have, but if there’s ever a tie, we still lean toward pretty much any other airline. American may have softened its policies, but it no longer has the infrastructure or programs that allow us to help our clients the way the other airlines do if something goes wrong. We want to book airlines that make it as easy as possible to take care of our clients, so American is still at the bottom.

So, it’s going to take some time. But hey, this is at least a start.

American Begins Its Apology Tour Over Sales and Distribution Fiasco

American Begins Its Apology Tour Over Sales and Distribution Fiasco

American Begins Its Apology Tour Over Sales and Distribution Fiasco

American Begins Its Apology Tour Over Sales and Distribution Fiasco

American Begins Its Apology Tour Over Sales and Distribution Fiasco