Amid news of cuts to its revenue and profit forecast and its stock tumbling in value, American Airlines has indicated that it will reverse course on its controversial New Distribution Capability (NDC) plans and some AAdvantage requirements.
Speaking this morning at an investor conference, American Airlines CEO Robert Isom said that the carrier is considering changes to its plan to drive direct bookings with the airline and away from third-party sites and travel agencies.
The NDC technology was touted as a richer airline shopping experience for buyers and American Airlines had set a deadline for distribution channels to be able to connect to it.
Several major industry organizations and other parties had protested the deadline issued by American, but the airline continued to plod forward with its proposed changes.
The airline’s new system also angered agencies that were not able to access all of the carrier’s fares as they had previously. The changes made it harder to sell tickets on American flights.
What’s more, in February, American Airlines had said it would limit some travel agency bookings from being eligible for AAdvantage frequent flyer miles. However, during comments on Wednesday, Isom said the airline is reversing that decision.
American Airlines President Robert Isom. (photo courtesy American Airlines)
“That’s off,” Isom said, according to CNBC, in regards to the AAdvantage limitations. “We’re not doing that because it would create confusion and disruption for our end customer.”
Speaking about the revenue weakness the airline is facing, Isom alluded further to the NDC fiasco and the challenges it had caused. Isom said that the airline’s capacity planning ultimately did not match consumer demand, to which he added that its sales and distribution strategy were off-base.
“We moved faster than we should have and didn’t execute well,” Isom said. “We regret that and the difficulty it created for our agency and corporate communities.”
The American Society of Travel Advisors (ASTA) had continually pushed back
against American Airlines’ NDC rollout and today the organization
praised Isom’s comments and change of direction.
“I’m grateful for American Airlines’ renewed recognition of the essential role that travel advisors play in facilitating air travel for our shared customers,” Zane Kerby, ASTA’s president and CEO said in a statement. “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 also expressed gratitude for the ASTA Board of Directors and their commitment to bringing about change on the NDC issue.
“Because of their efforts, we were able to activate thousands of travel advisors and their customers in an unprecedented grassroots effort. Thank you to everyone who stood behind us,” continued Kerby.
“I look forward to working with American Airlines on a responsible implementation of its NDC program which includes its valuable partners in the travel advisor community,” Kerby added.
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