American Airlines recently introduced a commission program for New Distribution Capability (NDC) bookings. The program offers a 10% commission for bookings of American’s Main Plus, Main Select, and Flagship Business Plus bundles that are NDC-enabled. While the exact details of the program have not been widely publicized, anonymous travel agency sources have shared information about a memo they received from American outlining the initiative. It has been reported that the program is already in effect and will run through the third quarter.
This new program comes as part of a shift in American Airlines’ strategy regarding NDC bookings. In the past, the airline had taken a punitive approach to incentivizing agencies to embrace NDC-enabled bookings. However, in a turnaround move announced by CEO Robert Isom, American Airlines is now focusing on rewarding agencies that utilize NDC for their bookings. The decision to reverse the strategy came shortly after the removal of chief commercial officer Vasu Raja, who was spearheading the airline’s controversial distribution strategy.
The NDC commission program applies to American’s Main Plus, Main Select, and Flagship Business Plus bundles. The Main Plus bundle includes perks such as preferred seating and checked baggage. Main Select offers additional benefits like refundable fares, same-day flight changes, priority boarding, and priority check-in. The Flagship Business Plus bundle is targeted towards long-haul flights and includes business-class seating, access to premium check-in areas, expedited security screening, Flagship First dining, and an extra checked bag.
Despite the new incentive program, American Airlines faced challenges during the implementation of its strategy to shift bookings away from legacy GDS systems towards direct and NDC-enabled channels. This approach led to backlash from travel agencies and industry organizations like ASTA due to servicing limitations on American tickets booked through NDC. The resistance from the travel industry ultimately prompted American Airlines to reassess its strategy and prioritize regaining trust among travel advisors.
Many travel advisors, while acknowledging the new commission program, express lingering frustrations with American Airlines. Some independent contractors, eligible for the NDC commission program, continue to book away from the airline. The sentiment among travel advisors suggests that rebuilding trust and improving service quality will be critical for American Airlines in retaining and attracting business from travel agencies and advisors in the future.
Overall, American Airlines’ introduction of the commission program for NDC bookings represents a strategic shift in approach towards incentivizing agencies to utilize NDC technology. The airline’s focus on rewarding NDC-enabled bookings and enhancing the overall booking experience for travel agencies and advisors signals a commitment to adapting to changing market dynamics and prioritizing partnership with the travel industry.
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