• Sun. Jul 14th, 2024

American Airlines is paying commission on NDC bookings: Travel Weekly

American Airlines has launched a commission program for New Distribution Capability (NDC) bookings. 

The program, first reported by The Beat newsletter, pays 10% commission for NDC-enabled bookings of American’s Main Plus, Main Select and Flagship Business Plus bundles. 

Anonymous travel agency sources provided The Beat with details on a memo they received from American introducing the new program, which has already taken effect and lasts through the third quarter. Representatives from two agencies have confirmed receipt of the memo to Travel Weekly. The advisors asked that their names not be revealed due to the sensitivity of their commercial agreements. 

On May 29, American CEO Robert Isom announced that the airline would reverse course on its strategy to pull travel agencies toward NDC-enabled bookings through a serious of punitive measures and instead turn its focus toward rewarding agencies that book with NDC. 

A day earlier, American had announced the removal of chief commercial officer Vasu Raja, who had been the architect of the airline’s controversial distribution strategy. 

On May 30, American sent letters to travel agencies stating that they’d soon receive additional information about its preferred-agency program as well as about upcoming incentives for NDC bookings.

American’s Main Plus NDC bundle includes a Main Cabin Extra or preferred seat and a checked bag. Main Select offers refundable fares, same-day flight changes, priority boarding, priority check-in and the choice of all seats in the main cabin at the time of booking, including Main Cabin Extra.

The Flagship Business Plus bundle is geared toward long-haul flying and includes a business-class seat plus access to private Flagship First check-in areas and expedited security screening; access to Flagship First dining in American’s Flagship Lounges; and a third checked bag. 

During the 13-month implementation of its strategy for driving bookings away from legacy GDS technology and toward direct and NDC-enabled channels, American slashed its agency-facing sales staff, canceled corporate incentive contracts, removed the majority of its fare content from legacy GDSs and implemented or announced a series of measures geared toward rewarding direct bookings with the airline — especially for members of the AAdvantage loyalty program. 

The moves met with sharp resistance from ASTA and travel agencies, which spoke out about servicing limitations on American tickets booked via NDC. 

Isom ultimately said a course reversal was necessary because the strategy was causing American to lag behind its domestic competitors, especially on close-in bookings. American said Tuesday that basic economy fares are only available in NDC channels, implying that all other fare content is returning to traditional distribution systems. United Airlines has a similar strategy. 

Several travel advisors have since said that American will have to work to regain their trust. One travel advisor, an independent contractor who is eligible for the new NDC commission program, said he continues to book away from American. 

“We’re still pissed,” he said.

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This report was updated on June 11 to add that American’s basic economy fares will only be available to travel agencies in NDC channels.

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