When a stick doesn’t work, reach for a carrot—and apparently that’s the smart new approach to its travel-agency partners at American Airlines. The carrier has followed up the recall of its highly unpopular NDC booking strategy by promising to pay 10% commission on NDC-enabled bookings of Main Plus, Main Select, and Flagship Business Plus ticket bundles through the third quarter of 2024.

Main Plus NDC bundles include a Main Cabin Extra or preferred seat and a checked bag. Main Select offer refundable fares, same-day flight changes, priority boarding, priority check-in and a choice of any seat in the main cabin at the time of booking, including Main Cabin Extra. Flagship Business Plus includes a business-class seat, access to a private check-in area, expedited security screening, Flagship First dining in a Flagship Lounge and a free third checked bag.

The news comes as a welcome bow to the role of travel advisors in the industry. Just two weeks ago, AA’s CEO Robert Isom canceled a set of proposed procedural changes that would have denied frequent-traveler points to travelers on bookings not made by preferred travel agencies through the NDC direct channel. In a quarterly call on May 29, Isom acknowledged that the changes—meant to push travelers and travel agencies to use direct channels instead of GDSs—had resulted in falling revenues and forced a cut in AA’s profit forecast.

By the next day, Vasu Raja, author of the stick approach, was gone—and Isom apparently already was reaching out to travel advisors, instead offering commissions to reward those who showed support.

The business travel blog The Beat first broke the story that several travel agencies, all of whom requested anonymity per their contracts with AA, received a memo from American Airlines introducing the program on May 30. It will last through the third quarter of 2024.

AA’s hard stance on pushing direct bookings, which included no longer offering frequent-flyer points to travelers who don’t book direct, apparently has backfired. AA cut its revenue and profit forecasts In its quarterly earnings call yesterday, and today watched its shares tumble 18%—the biggest fall since Covid.

As a result, American will be forced to cut its capacity growth for the rest of the year by about 8% and part ways with chief commercial officer Vasu Raja, who headed the strategy that encouraged travelers to bypass travel advisors and other third parties.

“We know we’ve dug ourselves a hole in this second quarter, and our operating earnings are going to be off by a couple of hundred million dollars. We’ve got a lot of work to do to recoup that,” said American CEO Robert Isom.

Indeed, ASTA in August filed an unfair trade complaint against American with the US Department of Transportation, accusing the carrier of causing “substantially higher air ticket prices for consumers and frustrated travel management companies” by pushing agencies to use AA’s NDC direct-booking technology.

The announcement comes just days after AA’s May 1 deadline, after which it said it would award AAdvantage miles and loyalty points only to customers of “preferred” agencies, meaning those that have a 2024 incentive agreement or American NDC channel, and use it for 3% of sales by April 21, 50% by October 31 and 70% by April 30, 2025.

Last week, after ASTA responded to American Airlines’ move to deny frequent flyer privileges to customers who are not booking through its New Distribution Capability (NDC), I had the good fortune of speaking with William McGee. He is one of the top authorities on airlines, and a consumer advocate in the never-ending battles between airlines and the public they are mandated to serve. There is no better way to get clarity on airline issues than to speak with McGee Read the rest of this entry »

In the latest step toward pushing customers to book direct, American Airlines today announced that it will only grant AAdvantage® miles and loyalty points to customers who book through an AA or partner site, a corporate account, or a “preferred agency” that books at least 30% of its trips through the American Airlines NDC.

At the same time, the company raised fees on baggage checking and pets in the cabin.

The NDC ruling takes effect May 1, 2024. Customers can receive points only if they book through AA or its partner airlines, are an AAdvantage Business™ member or have a contracted corporate travel account, or book through an “eligible preferred travel agency.”

“All agencies on a 2024 contracted incentive agreement issued by American are eligible to qualify into the preferred agency program at American’s sole discretion, which enables travelers booking through your agency to continue earning AAdvantage^® miles and Loyalty Points,” the company website now states (Preferred agency program – American Airlines Global Sales (exploreamerican.com). “Agencies will be evaluated on the criteria outlined below, which focus on the use of Modern Retailing technology to provide the best possible traveler experience when booking and servicing tickets. Agencies must be approved by American Airlines to qualify as a preferred agency, and agencies should contact their Modern Retailing business manager to discuss their individual approval process and timeline.”

There are three qualifying criteria:

1. Agencies must be on a 2024 incentive agreement issued by American at American’s sole discretion. If, at any point, their incentive agreement with American ends, the agency will no longer be able to participate in the preferred agency program.
2. Agencies must adopt and implement American’s NDC and shop and book through American’s NDC connections, meeting the progressive NDC thresholds below. Shopping and booking must be done in accordance with American’s connection and capacity requirements.

3. As customers consider purchasing an American Airlines offer, fare rules, product attributes, and fare restrictions should be fully displayed and clearly communicated. A new product attribute of American’s offers is the ability to earn AAdvantage^® For an agency to be considered preferred, they must demonstrate their ability to clearly communicate to customers when they earn AAdvantage^®miles in the online booking tool throughout the booking flow before a purchase is finalized.Agencies must contact their Modern Retailing business manager to begin the review and approval process on display criteria.

   The deadline for the display qualification criteria is July 1, 2024, to allow time for the completion of any necessary updates.

   If an agency meets the criteria for the first NDC threshold on April 21, 2024, customers with tickets issued by the preferred agency between April 21 and June 30 will earn miles and Loyalty Points. In order for customers purchasing a ticket July 1, 2024, and beyond to earn, however, the agency must meet the display criteria.

Basic Economy fare tickets will only earn when booked directly with American and eligible partner airlines.

“We want to make it more convenient for customers to enjoy the value and magic of travel,” said Vasu Raja, American’s Chief Commercial Officer. “Not only does booking directly with American provide the best possible experience, it’s also where we offer the best fares and it’s most rewarding for our AAdvantage members.”

Baggage Fees on the rise

Also in the announcement were new rates for baggage on trips booked beginning tomorrow.

The new fee for domestic flights including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands, as well as Canada and short-haul international flights, is $35 for the first checked bag if purchased online or $40 at the airport. A second bag will cost $45 whether purchased online or at the airport.

AAdvantage® status members, customers in premium cabins, active-duty U.S. military personnel and most AAdvantage® credit cardmembers flying domestically will continue to receive complimentary bags.

The fee for oversize bags that are only slightly larger than heavier than regular bags will be lower, however. Bags that weigh less than 70 pounds currently cost $100, but will be charged just $30 effective April 17.

The pet-in-cabin fee was raised to $150.

Even as President Biden promises to crack down on tacked-on fees in the travel industry, American Airlines has rolled out a new one.

Effective immediately, travelers on international flights booked in basic economy now will be charged $75 for the first checked bag, $100 for the second, and $200 for the third. The fee applies “per person, each way, even if you purchase or get an upgrade that includes free checked bags,” the AA website notes Checked bag policy − Travel information − American Airlines (aa.com).

American partner British Airways also no longer allows a free bag in basic economy. Flying a code-share Qatar flight on AA will not help either; Qatar’s website notes that “where a code-share or interline flight is part of an itinerary that begins or ends in the USA or Canada, baggage allowances applicable at the itinerary’s origin will apply throughout.”

So far, United and Delta have not changed their policies, and still offer one free checked bag on international flights.

A federal judge has ruled that American Airlines and JetBlue must end their Northeast Alliance because it is anti-competitive.

Formed in 2021, the partnership allows the two carriers to coordinate schedules, swap slots and share revenues at JFK, LaGuardia and Newark Airports in the New York metropolitan area, and Logan Airport in Boston.

U.S. District Judge Leo Sorokin ruled in favor of the Justice Department, which had brought the suit in partnership with six states. Combining two of the four largest US airlines, the Northeast Alliance has decreased the number of flights at the four airports, and violates the Sherman Antitrust Act.

The Alliance “makes the two airlines partners, each having a substantial interest in the success of their joint and individual efforts, instead of vigorous, arms-length rivals regularly challenging each other in the marketplace of competition. Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim. Whatever the benefits to American and JetBlue of becoming more powerful—in the northeast generally, or in their shared rivalry with Delta—such benefits arise from a naked agreement not to compete with one another,” Judge Sorokin wrote in his decision.

The Boston Globe called the ruling “a major victory for the Biden administration, which has used aggressive enforcement of antitrust laws to fight against mergers and other arrangements between large corporations,” noting that an economist predicted it would cost consumers more than $700 million a year extra if American and JetBlue stopped competing in the Northeast.

While American Airlines yesterday reported positive results year to date, capacity remains an issue as domestic airlines continue to struggle with pilot and staffing shortages.  American will continue to fly below 2019 capacity levels in the third quarter, but nevertheless, projects increased revenues resulting from higher fares. Delta, United, and American have now all reported Q2 profits due to a strong travel rebound and higher fares.

Read the rest of this entry »

Flying business class on American Airlines has some new perks. But there’s an extra fee, of course. Read the rest of this entry »

Taking advantage of the surge in demand, American Airlines is dramatically increasing its service to Dublin, Ireland with new flights from Charlotte, Chicago, and Dallas through October 29. Read the rest of this entry »

The U.S. Travel Association and other signatories sent a letter to the White House Coronavirus Response Coordinator requesting the end of pre-departure Covid testing for air travelers to help the economy bounce back and return to normal.

The letter was signed by American Airlines, Carnival Corp, Marriott International, Walt Disney Co’s Disney Parks, the U.S. Chamber of Commerce, U.S. Travel Association and others.

“Given the slow economic recovery of the business and international travel sectors, and in light of medical advancements and the improved public health metrics in the U.S., we encourage you to immediately remove the inbound testing requirement for vaccinated air travelers,”  the letter stated.

All air passengers 2 years or older with a flight departing to the US from a foreign country have been required to show a negative COVID-19 viral test result taken no more than 1 day before travel, or documentation of having recovered from COVID-19 in the past 90 days.

The travel industry has expressed concern that many Americans are not traveling internationally fearing they will test positive and be stranded.

Six out of every 1,000 checked bags in US airlines were reportedly lost, stolen, or mangled in the second half of 2021, according to the report conducted by LuggageHero.

The travel industry is back on track again and as the world slowly adapts and transitions to the “new normal,” more people across the globe are looking to travel this year.

But for all of the wonderful things travel’s return means for travelers, it also sages a return of mishandled luggage as a side effect of the surge. 

LuggageHero, a luggage storage service locator, annually produces a report highlighting the number of bags the airline lost and mishandled last year. According to the report, a total of 1,251,209 out of 220 million checked bags, or about 6 out of every 1,000 pieces of luggage pass through the airline’s hands. These figures, according to LuggageHero are 80.6% worse than the first half of 2021.

The report also indicates the best and the worst airlines in terms of travel baggage management. Envoy Air ranked worst followed by American Airlines. From July to December last year, the two airlines have reportedly lost and mishandled 9.04 and 8.62 bags per 1,000 luggage, respectively. 

Allegiant Air scores the highest in terms of safe baggage handling. For the past four years, the airline lost 1.85 bags only out of 1,000 in the second half of 2021. Allegiant Air is followed by Frontier Airlines and Hawaiian Airlines. 

December appears to be the worst month for your luggage’s chances of arriving at your destination with you, while September is the safest.

​Last week, the CEO of American Airlines, Doug Parker said that checking passengers for proof of vaccination wouldn’t be physically possible on domestic flights without causing enormous delays to the airline system.

It’s tempting to compare Mr. Parker’s statements to similar ones made by tobacco and asbestos CEOs, who insisted that health authorities should not regulate their products. What he probably should have said was,“Without some form of proof that a person is vaxxed, and streamlined airport procedures, it isn’t physically possible for domestic flights to check passengers for proof of vaccination.”

Many of the problems airlines and airports encounter involving COVID-19 could be prevented if passengers couldn’t enter either without verified vaccination credentials and a one-minute COVID antigen swab test, or a breath analyzer test at a TSA security portal. Read the rest of this entry »