American Airlines made two significant pivots in the course of about 14 months.
The first, which started April 3, 2023, was its New Distribution Capability push that included pulling at least 40 percent of its fares out of traditional EDIFACT channels. The carrier also pretty much dismantled its corporate sales team, sending a message that some buyers interpreted as that the carrier didn't need the corporate market anymore. The second, which started in late May 2024, was American unwinding much of that prior strategy.
CEO Robert Isom was the leader overseeing both decisions.
It isn't easy to admit when you've made a mistake, especially one that is estimated to have cost American about $1.5 billion in lost revenue, but Isom did just that. He noted during an investment conference in late May that American regretted the way it executed its NDC strategy and that the company "moved faster than we should have."
American's domestic bookings in the second quarter of this year were softer than it expected, and executives believed that was due in part to the sales and distribution strategy changes, the carrier told BTN in an email. By May, the airline acknowledged that its strategy wasn't working and reacted. Chief commercial officer Vasu Raja, who was recognized on this list last year for American's NDC strategy, was out. The carrier began to restore its EDIFACT fares. It scrapped a preferred agency program plan. It expanded the availability of AAdvantage Business benefits to bookings through all channels, not just direct or NDC ones. It started to rebuild its corporate sales team. It began reaching out to corporate clients, many of whom were upset, as well as to travel management companies to make amends. It relaunched its corporate experience program.
American now is "adapting to customers' needs and ensuring we are easy to do business with," according to the carrier. It also noted that it "has to be better at executing our strategies for our customers."
Agency and corporate customer responses to these recent changes "have been positive and we have seen share shift back to American," the carrier said, adding that it also has amended agreements with many of its top corporate customers.
Isom also noted that course-correcting with the corporate segment would "take time." Still, American was encouraged by the third-quarter booking trajectory, and the carrier aims to fully restore its revenue from indirect channels by the end of 2025.
Isom said that the company's corporate- and agency-flown revenue share had bottomed out at 11 percent below its historical share without providing an exact timeframe. As of late October, that figure had improved to about 7 percent below historical levels.
All this, of course, doesn't mean that American has abandoned NDC. Far from it. "We know that NDC-enabled channels provide a better retailing experience for the end customer," the carrier said. "We know that we will get there over time, but we have to go about it differently. We're going to execute better, and we're going to do a lot more to try to bring people along with us as technology progresses to improve our customers' shopping and booking experience."
Time will tell whether American can recapture its position in the corporate segment and how long it will take.