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.

Scott Austin had been with his host agency for only six months when things started to go wrong. A former hospital CFO, he signed up with Pinnacle Travel in 2022, and immediately immersed himself in learning about the industry first-hand. He traveled extensively with Pinnacle owner Annaliza Proctor to places like Puerto Vallarta and Cancun, and quickly came to consider her a “very, very good friend.”

When his first commission check failed to appear, he let it be. The second time, though, he called the supplier—and was told they had sent the money to Pinnacle 45 days earlier Read the rest of this entry »

With almost $2 million in sales within the first year of his travel business, Rick Ables feels like he “has the Avoya system down”—and he’s ready to move on.

His career in travel started when he was sitting in the hospital with a child on chemo. During that time he talked with a nurse about travel, and then about selling travel, and then about how the nurse was selling travel on the side through Avoya Travel. He was hooked.

For the past year, the proud owner of Nimble Travel LLC in Lindon, Utah, has been building his business almost entirely through four key suppliers—AmaWaterways, Oceania, Collette, and Globus/Avalon—and mostly with Avoya leads, on which he earns the standard 30% Avoya commission Read the rest of this entry »

TourRadar, a company that aggregates 2,500 international adventure operators offering 50,000 tour products on a single booking platform, has made its network of operators commissionable to the retail travel community. The company is offering 12 percent commission till June 30 as part of its efforts to invite potential travel advisor partners to its network.

Susan Shure is tired of suppliers who keep clients’ payments but refuse to pay her commission. So she’s paying no attention to the many notices she has received from Carnival Cruise Lines asking her to return $200 commission paid her on a cruise that was subsequently canceled.

“It’s not very much,” concedes the owner of Susan Shure Travel, “but it’s the principle of the thing. I’m ignoring them.”

It’s not just Carnival, of course. “This has affected me personally more times than I care to count—and what makes it even more frustrating is that it has happened repeatedly during Covid, when we already aren’t making as much. It has to stop. If the suppliers are keeping money, then we should be getting some of that.”