American Airlines has recently introduced a commission program for New Distribution Capability (NDC) bookings, offering a 10% commission for NDC-enabled bookings of American’s Main Plus, Main Select, and Flagship Business Plus bundles. This program, although not widely publicized, has already received attention from various travel agencies, leading to speculation about its effectiveness and impact on the industry.
According to sources, the new commission program introduced by American Airlines has raised questions about the airline’s previous distribution strategy, which involved pulling travel agencies towards NDC-enabled bookings through punitive measures. The reversal of this strategy, announced by American CEO Robert Isom, aims to reward agencies that book with NDC, signaling a shift in focus towards incentivizing the use of NDC channels.
The Main Plus NDC bundle offered by American Airlines includes additional benefits such as Main Cabin Extra or preferred seat, and a checked bag. The Main Select bundle provides refundable fares, same-day flight changes, priority boarding, and the choice of all seats in the main cabin at the time of booking. On the other hand, the Flagship Business Plus bundle targets long-haul flights, offering a business-class seat, access to private check-in areas, expedited security screening, and more.
During the implementation of its distribution strategy, American Airlines faced challenges from ASTA and travel agencies, who raised concerns about servicing limitations on American tickets booked via NDC. The airline’s decision to reverse course was driven by the need to remain competitive in the market, especially on close-in bookings where it lagged behind domestic competitors.
Travel advisors have expressed mixed reactions to the new NDC commission program, with some acknowledging the need for American to regain their trust following the controversial distribution strategy. While some advisors are eligible for the commission program, others remain skeptical and continue to book away from American Airlines due to lingering frustrations.
American Airlines’ launch of the commission program for NDC bookings marks a significant shift in its distribution strategy. The success of this program will largely depend on how well it is received by travel agencies and advisors, and whether it addresses the concerns raised during the implementation of the previous strategy. Only time will tell if this new approach proves to be beneficial for both American Airlines and its partners in the travel industry.