American Airlines is set to launch dynamically priced fares in its New Distribution Capability (NDC) channels. This shift in strategy comes after the airline’s recent decision to reverse its approach towards NDC conversion among travel agencies. The move, announced by American CEO Robert Isom, will not only involve selling dynamic fares but also introducing bundled offerings and exclusive ancillaries through NDC channels.
Taking a page from United Airlines’ playbook, American Airlines is following a similar path with its NDC strategy. United successfully implemented dynamic fares via NDC and removed basic economy fares from legacy GDSs. About 40% of United’s NDC fares were generated dynamically, showcasing the limitations of alphabet-based booking codes used by traditional GDSs.
Despite the transition to NDC channels, American Airlines is making efforts to maintain a positive relationship with travel agencies and corporate travel managers. While the airline previously faced challenges with agencies during its earlier NDC push, this time around, American is adopting a more collaborative and incentive-driven approach.
American Airlines has yet to provide a detailed timeline for the implementation of dynamic fares and NDC-exclusive offerings. The carrier has also left room for more information to be revealed in the coming months. With a revamped incentive program already in place for NDC bookings, American is poised to incentivize both bundled fare sales and ancillary purchases, emphasizing the importance of NDC channels in its overall distribution strategy.
American Airlines’ decision to embrace NDC channels for dynamic pricing marks a strategic shift in its distribution approach. By learning from industry peers and focusing on collaboration with agencies, the airline is positioning itself for success in the evolving distribution landscape. As the airline industry continues to adapt to changing consumer preferences and technological advancements, American Airlines’ move towards NDC channels reflects a commitment to innovation and improving the overall booking experience for travelers.