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Positive news coming in this morning from American Airlines: the Chief Commercial Officer, Vasu Raja, is leaving the company in June. According to industry articles, he was the main architect behind many of the changes we have seen from AA over the past year and more. CEO Robert Isom spoke this morning at the Bernstein Strategic Decisions Conference and stated that Preferred Travel Agency plan (which was supposed to go live on May 1) is off: “Next month, we were going to differentiate who earned Advantage miles and who didn’t based on where they booked. That’s off. We’re not doing that because it would create confusion and disruption for our end customer and we’re going to make sure that we take care of them.”
In addition, he spoke to NDC and distribution plans for the future: “We’re adapting our distribution strategy. While we all know that NDC, modern retailing, internet-based channels for selling our product is the future of airline distribution, but we moved faster than we should have and we didn’t execute well. We regret that and the difficulty that it created for our agency and corporate communities, so we are going to modify our distribution strategy. Specifically, we need to work closely with our agencies and partners to ensure that the transition that we’re making is not disruptive to our end customers.”
It'll certainly be interesting to see how things change in the coming months!
Posted : 29/05/2024 6:47 am
This is an interesting development. I'm curious to see the direction that the airline goes after this departure.
In potentially related news: "American shares tumble 15% after sales strategy backfires; carrier cuts growth"
https://www.cnbc.com/2024/05/29/american-airlines-growth-sales-strategy.html
Posted : 29/05/2024 7:29 am
Wow - hoping this is good news indeed for higher ed travel!
Posted : 29/05/2024 8:44 am
Interesting indeed. They likely saw a significant share shift due to the ill conceived plan rolling out NDC. Hopefully they will re-engage at the account level.
Posted : 29/05/2024 9:15 am
Solid share. Thanks Rebecca.
Dawn Cribari
Posted : 30/05/2024 3:04 am
Here is another article that may be of interest on the topic. It was shared to me by my TMC. https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fviewfromthewing.com%2Famerican-airlines-plan-to-drop-mileage-earning-from-travel-agency-tickets-is-off%2F&data=05%7C02%7Ceduchene%40cfo.pitt.edu%7Cf5e08c909f544933eabe08dc801b1038%7C9ef9f489e0a04eeb87cc3a526112fd0d%7C1%7C0%7C638526100965544303%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=af0Kn9YrBuPCatVRdVcPWguB5Gy7riulgxOfTk48APg%3D&reserved=0
Posted : 30/05/2024 3:16 am
Unfortunately I've seen this type of alienation to partners and suppliers from American Airlines over decades, in various shapes and forms. If you are in a hub market with little competition, it can be increasingly obvious that your business is taken for granted, and sometimes even a 'take it or leave it' approach. I thought American would be forced back to the table once their pain points hit home in the form of revenue loss and severe service issues. Stay tuned. I am sure there will be more fallout. Good news overall, for now...
Posted : 30/05/2024 3:37 am
I'm shocked it took them this long to "figure" things out. Let's see what the recovery looks like!
Posted : 30/05/2024 4:07 am
Y'all will love the latest quotes coming from AA in this article: https://www.reuters.com/business/aerospace-defense/american-airlines-shares-sink-after-q2-profit-forecast-cut-drags-other-airlines-2024-05-29/
Posted : 31/05/2024 4:41 am
It's going to take a long time before I trust this airline again! And some serious incentives. I'm still pushing status matches and other airlines ahead of them until they stabilize and act right!
Posted : 31/05/2024 7:04 am
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