American Airlines Pulls Back on AAdvantage Move

American Airlines is backtracking on its plan to tie loyalty points in its AAdvantage program to NDC bookings.

Speaking at the Bernstein Strategic Decisions Conference on Wednesday, CEO Robert Isom admitted that, in light of some bad Q2 numbers, American moved too fast with its NDC ticket sales strategy, and said that the carrier would be re-evaluating the move.

Isom, in his comments, acknowledged that American was experiencing a “softening” in some of its bookings that he tied directly to that planned sales and distribution strategy, and “to address this, we’re re-evaluating our distribution strategy holistically and piece-by-piece,” he said.

“We all know that NDC, modern retailing, and internet-based channels for selling our product is the future of airline distribution. But we moved faster than we should have and we didn’t execute well,” Isom said. 

“We regret that and the difficulty it caused for our agency and corporate communities,” he added.

Isom didn’t say what the new strategy would be but said that the carrier is “adapting” its distribution strategy and that it was committed to getting the customers back it had lost since announcing the change in February.

American announced that Vasu Raja, its executive vice president and CCO, would leave the role in June. Raja, who had been with American since 2004, had been in the CCO role since April 2022. American will now search for a new CCO and Stephen Johnson, the vice chair and chief strategy officer, will help lead the search for a new CCO.  

Travel agency community reacts 
The speed at which American moved, which Isom admitted was a mistake, was a major criticism of the American Society of Travel Advisors (ASTA), which threw itself fully behind the fight to stop American’s move.

“I’m grateful for American Airlines’ renewed recognition of the essential role that travel advisors play in facilitating air travel for our shared customers. I want to extend my thanks to American Airlines CEO Robert Isom for acknowledging its previous approach was flawed. Reversing the decision to withhold AAdvantage points and miles for agency bookings is a testament to the firm position that travel agencies hold in the airline distribution channel,” ASTA president Zane Kerby said in a statement shortly after the news broke.

Executives from ASTA, which is celebrating its Global Convention this week in Dallas, the home of American’s headquarters, said that they were grateful for the news.

“It was really our members who moved the needle,” Erika Ritcher, ASTA’s VP of Communications, said on Wednesday. “It was the highest engagement we ever had in any of our grassroots campaigns.”

“We’re very grateful for this change and we are open to continuing to work with American to find ways to strengthen their renewed appreciation for the travel agency distribution channels,” she added.

ASTA executives told the media that American had stopped communicating with the association about a year ago, which forced ASTA to double-down its advocacy efforts, including pushing members to write to their local representatives, and take out some ad buys, including two in Politico, which Ritcher called “substantial investments.”

The Association of Canadian Travel Agencies (ACTA) also celebrated the news.

 “ACTA expresses its sincere gratitude to all members who actively engaged in the advocacy initiatives, as their participation was instrumental in achieving this positive outcome,” said Wendy Paradis, ACTA president.

“While this development represents a significant victory for the retail travel sector, ACTA remains committed to maintaining a vigilant stance in protecting its members against any future actions or policies that may pose a threat to their business operations.”

“ACTA recognizes the importance of safeguarding the interests of its members and will persist in its advocacy efforts on their behalf,” she added.

What’s next
Isom didn’t specify what American will look to do next, only saying that “we’re going to be very attentive to the marketplace as time goes forward” and “over the coming weeks we’ll be working to ensure that we’re optimizing for our Customers and American as we move forward.”

ASTA, for its part, said it would be open to working with American to build a sound sales strategy that incorporated NDC while also looking out for agencies.

“Knowing them as I do, I would think they would be open to dialogue, and we would be open to talk to them, to have that dialogue with them, and to look at ways to refresh the relationship,” Mark Meader, the SVP for industry affairs and education at ASTA said.

However, there was one caveat from Kerby.  “As long as they are not arbitrary and unreachable goals associated with implementation,” he said.