At the Bernstein Strategic Decisions Conference this morning, American Airlines CEO Robert Isom declared that the carrier’s plan to eliminate mileage-earning from some travel agency tickets is off. It was too confusing. They still care about moving to NDC (new distribution capability), which mileage-earning on agency tickets was a lever to push agencies to adopt, but it is something that will happen “over time.”
In February American announced mileage-earning would be restricted to tickets that were booked direct, through airline partners, or – for non-basic economy fares – through preferred travel agencies.
Preferred agencies was based on increased ticket sales through NDC channels through which ancillaries can be sold and which costs American less.
This was supposed to happen May 1, was pushed off to July, and now will not happen. It’s a first day change with Chief Commercial Officer Vasu Raja’s departure. Raja had been committed to direct sales, and de-emphasizing managed corporate travel, betting that they could fill planes at higher fares without discounting. However American was not picking up the business travel uptick that Delta and United have, lowered its earnings guidance, and angered partners like British Airways who rely on managed business travel contracts to fill its premium cabins across the Atlantic.
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