American Airlines has recently introduced a commission program aimed at promoting bookings through New Distribution Capability (NDC). The program offers a 10% commission for NDC-enabled bookings of American’s Main Plus, Main Select, and Flagship Business Plus bundles. This initiative is a departure from their previous strategy of penalizing travel agencies for not using NDC-enabled channels.
The commission program was first reported by The Beat newsletter, but American Airlines has chosen not to provide further details about the program. The duration and extent of the program remain unclear, but it is reported to be in effect until the third quarter. The implementation of the program was accompanied by a memo sent to travel agencies, providing an overview of the new commission structure.
Reversal of Strategy
American Airlines’ decision to shift towards rewarding agencies for NDC bookings marks a reversal from their earlier approach, which involved punitive measures for bookings made through legacy GDS technology. The removal of the chief commercial officer, Vasu Raja, who was instrumental in implementing the previous strategy, further underscores this change in direction.
Main Plus, Main Select, and Flagship Business Plus Bundles
The commission program applies to bookings made under American’s Main Plus, Main Select, and Flagship Business Plus bundles. These bundles offer a range of benefits, including seating preferences, checked bags, priority services, and access to premium amenities. The Flagship Business Plus bundle, in particular, targets long-haul flyers with additional perks such as business-class seating and enhanced airport experiences.
The announcement of the commission program and the shift in American Airlines’ distribution strategy have raised concerns among travel agencies. The abrupt changes in approach and the removal of fare content from legacy GDSs have created uncertainty and challenges for agencies in adapting to the new system. Some advisors have expressed skepticism about American’s ability to regain their trust following these changes.
Feedback from Travel Advisors
Travel advisors eligible for the new NDC commission program have shared mixed reactions to American Airlines’ initiatives. While some continue to book with American, others express lingering frustrations with the airline’s previous strategies. The need for American to rebuild relationships with travel advisors and address their concerns is evident from the feedback received.
American Airlines’ introduction of a commission program for NDC bookings marks a significant shift in their distribution strategy. The move towards rewarding agencies for NDC-enabled bookings reflects a broader industry trend towards embracing new technologies and direct booking channels. However, the impact of these changes on travel agencies and advisors remains to be seen, with uncertainties and challenges arising from the transition. It is imperative for American Airlines to communicate effectively with their partners and address any concerns or issues that may arise during this period of transition.