American Airlines Revisits NDC Misstep at ASTA’s Annual TAC

On what was essentially the anniversary of ASTA’s—and the U.S. travel trade’s—victory in the NDC battle, American Airlines took the stage at the Travel Advisor Conference (TAC) in Salt Lake City this week to revisit its controversial New Distribution Capability (NDC) rollout, a move it famously walked back during last year’s TAC.

That rollout, initially seen as an effort by American to bypass the trade by stripping agency clients from its loyalty program and pushing consumers to book direct, sparked a swift and outsized reaction from ASTA. The backlash quickly turned American into a common adversary across the travel advisor community.

While American has since issued some mea culpas, the airline again addressed the misstep and its motivations on stage this week.

Lucas Martin, American’s new senior vice president of global sales, who took over the role just three months ago, joined travel journalist Peter Greenberg on stage to reflect on the decision—among other topics.

Martin, who was not at the airline during the initial rollout, said the team at the time viewed the advisor channel as “underperforming” and “really expensive” to sell through.

“We saw a lot of fundamental assets in the business and this new distribution tech, NDC, in which we had a leading position,” Martin said. “The question was: does the business case make sense for this expensive channel? That was the underlying strategy.”

That strategy, however, quickly backfired. Weak earnings reports revealed the extent of the damage caused by alienating the travel advisor community. “What was clear was that a strategy reset was needed,” Martin said—one that eventually led to his hiring from consulting firm Bain & Company.

Martin said American is now shifting course and embracing the advisor channel, and that right or wrong (the latter most likely, as proven by the backlash and backtracking), American did not feel that reciprocal support coming out of the pandemic.

“One of the things I’ve always stressed to the team is that we’re focused on being great partners to those who want to be great partners to us,” he said. “We didn’t feel like, in ’22 and ’23, there were many instances of great partnership.”

Martin said the airline is now focused on rebuilding trust with the trade, starting with the internal infrastructure needed to support it.

“The first thing it starts with is building the organization to just have the capacity to have those conversations,” he said. “Our first wave of hiring is 175 new people in my org that are just focused on that.”

Martin acknowledged that listening hasn’t always been American’s strong suit in the past.

“What’s really important for us to do is listen. I don’t know that we’ve done all that well at that,” he said. “As we build up the capacity to listen, we’re also building the solutions to take action on that feedback and what we’re hearing about different market opportunities.”