After backing away from its controversial plan to change its loyalty program, American Airlines says it has learned its lesson and will work more closely with travel advisors and trade partners.
American Airlines CEO Robert Isom said on 29MAY that the airline will not implement proposed changes to its Loyalty Points program. Under the original plan, passengers would earn frequent flier miles, and loyalty points only if they had booked directly with the airline or with one of its preferred suppliers.
Travel adivisors around the world hit the roof, arguing the move was a way to force agencies to adopt American’s NDC or get consumers to bypass advisors by booking directly. Both ACTA and ASTA fired off strongly-worded protest letters and launched high-profile campaigns to get American to hit the reverse button.
Isom has backed down but said he hasn’t given up on direct distribution.
"We need to work closely with our agencies and partners to ensure that the transition that we're making is not disruptive to our end customers,” he said at a business conference.
“We’re learning and adapting,” Isom said. “We know that NDC, modern retailing provides a better experience for the end customer. And we know that we will get there over time, but we have to go about it differently.
“We’re going to make it easier, we’re going to execute better and we’re going to do a lot more to try to bring people along with us.”
Retailers on both sides of the border praised the course change.
ACTA said America’s ill-advised proposal “would have had an extremely detrimental impact on the retail travel community limiting traveller loyalty points accrual to bookings made by ‘preferred’ agencies and direct bookings only.”
“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 ACTA president Wendy Paradis. “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.”
Zane Kerby, president and CEO of the American Society of Travel Advisors, applauded the airline’s reversal.
“I’m grateful for American Airlines’ renewed recognition of the essential role that travel advisors play in facilitating air travel for our shared customers,” he said in a story posted on Skift.com. “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.”
Kerby said he welcomed the opportunity to work with American Airlines on a “responsible implementation of its NDC program.”
ASTA was so angry with the plan that it started a public campaign to make AA rescind a plan it called “anti-consumer” and “anti-competitive.”
"This latest development doubles down on American Airlines' clear agenda since last year to force the travel agency industry to adopt immature technology, monopolize distribution channels, and squeeze channel partners and customers for cost-cutting and profit," ASTA said earlier this year. “American’s behavior is monopolistic and should be concerning to lawmakers who value consumer choice."
The association argued that many agencies had no clue if they were going to make it onto American’s preferred supplier list.
Isom said the carrier’s strategy was creating confusion, which had driven customers to book flights with rival airlines.
“Next month, we were going to differentiate who earned AAdvantage Miles and who didn’t, based on where they booked,” he said as he explained the airline’s reversal.
“That's off. We're not doing that because it would create confusion and disruption for our end customer."
